PC Sales Grow at Solid Rate

FRAMINGHAM (04/24/2000) - Worldwide PC shipments grew at a fairly solid rate during the first quarter, although the sluggishness of corporate sales dragged the numbers down a bit, two analyst firms reported today.

San Jose-based Dataquest, a unit of Gartner Group Inc., reported that worldwide PC shipments grew 15 percent during the first quarter, driven by strong growth in the Asia/Pacific region, Japan and Latin America. Meanwhile, International Data Corp. (IDC) in Framingham, Mass., said estimates show that first-quarter worldwide PC sales expanded 20 percent over last year, carried by growth in Asia/Pacific (36 percent) and Japan (35 percent). In the U.S., year-over-year growth was 17 percent, IDC reported.

"The growth is still solid in the U.S. and worldwide markets," said IDC analyst Bruce Stephen. "What really continues to carry the market is consumer demand."

IDC thinks that Y2k-induced spending limits have prompted U.S. companies to curtail their purchase of PCs, but Stephen said he expects that pattern to change in the second half of the year, as companies start to acquire and implement Microsoft Corp.'s Windows 2000 operating systems.

That would be welcome news to Microsoft investors. A Microsoft official last week blamed lower future growth projections, in part, on soft sales of corporate PCs (see story).

In the U.S. PC market, Dell Computer Corp. remained No. 1 with 17.1 percent market share, followed by Compaq Computer Corp. at No. 2 with 16.3 percent, according to IDC estimates. Hewlett-Packard Co. broke its tie with IBM for the No. 3 position, commanding 12.2 percent of the market. Gateway Inc. was next (9.0 percent), and eMachines (4.5 percent) broke into the top five for the first time.

Stephen attributed IBM's dramatic reductions to the fact that the company pulled out of the U.S. retail market and suffered from slow corporate sales.

On a worldwide basis, IDC figures showed Compaq at No. 1 with 13.1 percent market share, trailed by Dell (10.5 percent), HP (8.1 percent), IBM (6.1 percent) and Fujitsu Siemens (5.6 percent).

Dataquest noted that HP, based on the success of its Pavilion series, posted the strongest growth among top-tier vendors. Although experiencing a slowdown in the quarter, Dell moved closer to threatening Compaq's lead in the worldwide market, according to Dataquest.

Dataquest figures show Compaq with 12.5 percent of the worldwide market, compared with 10 percent for Dell.