Falling prices fuel 17pc growth in PC sales


18 Oct 2005

Share on FacebookTweet about this on TwitterShare on LinkedInShare on Google+Pin on PinterestShare on RedditEmail this to someone

Share on FacebookTweet about this on TwitterShare on LinkedInShare on Google+Pin on PinterestShare on RedditEmail this to someone

Falling prices and rising demand for mobile computing devices such as notebooks led to a 17.2pc increase in third-quarter PC shipments totalling 55 million units, Gartner said this morning.

Although Dell continued to lead the PC industry in shipments, for the first time in seven years its growth rate was equal to the worldwide average, rather than above it.

“Strong market growth continued to be driven by lower prices and mobility in the third quarter,” said Charles Smulders, vice-president of Gartner’s Computing Platforms Worldwide Group. “These factors sped up new PC adoption and replacement activities. Overall market growth exceeded expectations, with home demand for mobile being particularly strong.”

In the US, PC shipments totalled 17.9 million units in the third quarter of 2005, a 10.5pc increase from the same period last year. Back-to-school PC purchases were the largest growth segment for vendors. The home market received a boost from mobile PC sales. “Solid mobile PC growth in the US home market indicates the growing number of households with multiple PCs,” said Mika Kitagawa, principal analyst in Gartner’s Computing Platforms Worldwide Group.

In the Europe, Middle East and Africa (EMEA) region, PC shipments totalled 17 million units in the third quarter, an increase of 18.2pc over the same period last year. “For the third consecutive quarter this year the PC market in EMEA showed robust shipment growth,” said Ranjit Atwal, analyst for Gartner’s computing platform group in EMEA. “In the first half of the year we saw significant price declines boost demand. In the third quarter of 2005, the cost of PC components stabilised and further declines in PC prices were less severe. However demand remained strong. This could mean that prices for consumer PCs reached an optimal point, encouraging both new users to buy earlier and replacement buyers to purchase sooner than expected.”

Dell continued to lead the PC industry in worldwide PC shipments with some 9.2 million units shipped in the third quarter and a 16.8pc market share. However, for the first time in seven years, Dell’s worldwide PC shipment growth rate of 17.6pc was essentially equal to the worldwide average, rather than significantly above it. Gartner analysts said the results reflect Dell’s focus on increasing profitability rather than pursuing market share gains.

Hewlett-Packard’s (HP) worldwide growth of 18.5pc was slightly ahead of the worldwide average. The company shipped some 8.3 million PCs during the quarter and recorded a 15.2pc global market share. HP experienced steady growth in the US, but disappointing results in the EMEA region.

After a strong performance above the market average in the second quarter of 2005, HP fell behind in the third quarter. While the company’s mobile growth was strong, it achieved lower growth from the desk-based market, dragging down overall growth. This continued trend has allowed Dell to reduce the market share difference between the top two vendors by more than 3pc since HP’s merger with Compaq.

HP was followed in third position by Lenovo – the Chinese computer maker that earlier this year acquired IBM’s PC division for US$1.25bn – which shipped four million units and has a 7.4pc share of the global PC market. Lenovo was followed in fourth place by Acer with 2.4 million units shipped and a 4.4pc market share and Fujitsu Siemens with two million units shipped and a 3.7pc world market share. The remaining 52.5pc of the market, consisting of a variety of manufacturers, shipped 28.9 million units.

“The top 10 vendors strengthened their position by gaining market shares to the detriment of local vendors in western Europe, who again found themselves uncompetitive in the mobile PC market. The strongest performing vendors were Acer, Apple Computers and NEC,” Atwal explained.

Gartner says the outlook for the fourth quarter is expected to be strong, making 2005 record an impressive double-digit shipment growth for the EMEA PC market.

By John Kennedy