Researchers: Worldwide PC market declines

Two research firms are reporting that worldwide sales of PCs dropped in the second quarter of the year, with International Data Corp. (IDC) saying it's a first and Dataquest Inc., a division of Stamford, Connecticut-based Gartner Inc., saying the decline was the first since 1986.

According to both firms, shipments of PCs in the second quarter declined by approximately 2 percent, or 30 million units, from the same quarter a year ago. And Framingham, Massachusetts-based IDC said the Japanese PC market is grinding to a halt as economic conditions worsen there.

According to yesterday's report from IDC, the Japanese market, which managed 30 percent growth in 2000, succumbed to worsening economic conditions. PC shipment growth in the second quarter there was just about flat, as consumers and businesses delayed purchases or canceled them outright.

"It now looks like the PC market in Japan will be flat to negative into 2002," said Loren Loverde, director of IDC's Worldwide Quarterly PC Tracker. IDC also said growth in Europe declined in the second quarter, though not as dramatically.

Asked about the disparity in reporting that the decline was the first one ever reported, IDC officials said that while there have been slow periods and sequential declines between quarters, this is the first year-over-year decline ever.

San Jose-based Dataquest, which released its report today, said the U.S. experienced a second consecutive quarter of decline as the U.S. PC market shrank 6.1 percent in the second quarter of 2001.

And the future doesn't look very bright, either.

"Without a major shift in the PC industry structure, future sustained high-growth rates are improbable," Todd Kort, a Dataquest analyst, said in a statement. "For the time being, vendors continue to opt for price cutting rather than changing PC design to stimulate growth."

IDC, however, was a bit more optimistic in its forecast, at least for U.S. sales.

"Although shipment levels in the United States remain depressed, the seasonal pattern appears to be holding, albeit at a lower level than last year," said Roger Kay, director of client computing at IDC, in the statement. "Businesses are spending cautiously, and consumers have still not emerged from their shells. But there is some hope that the worst is behind us. Toward the end of the year, we expect a modest boost from the back-to-school and holiday seasons, aided by a mild stimulus from Windows XP deployment, particularly in the home."

The companies agreed that Dell Computer Corp. was the only top-tier vendor to show growth worldwide and in the U.S. in the second quarter. In the first quarter, Dell surpassed Compaq Computer Corp. as the No. 1 PC maker in the world.

According to Dataquest, Dell increased shipments throughout the world, particularly in Japan, Asia/Pacific and Latin America, with 30 percent to 50 percent growth.

According to IDC, Compaq, Hewlett-Packard Co. and San Diego-based Gateway Inc. had a particularly tough time in the U.S. because of pricing pressure and a continued lack of demand from consumers. IDC said IBM also grew more slowly in the U.S. despite its larger commercial focus.

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