As PC shipments are used as one factor in the health of the semiconductor industry, two market research companies – Gartner Inc and IDC – both released preliminary estimates for worldwide Q1 PC shipments, highlighted by the fact that the sluggish US economic situation only modestly affected the PC market, although that will likely change later in the year.

Stamford, Conn-based Gartner reported that worldwide PC shipments totaled 71.1 million units in Q1, which was 12.3% higher year-over-year from Q1 2007.

Meanwhile, Framingham, Mass-based IDC figured worldwide PC shipments grew a bit higher, 14.6% to 69.5 million units in Q1, which was above previous estimates of 13.2%.

Mika Kitagawa, principal analyst for Gartner’s client computing markets group, noted that the US results were in line with expectations, indicating that the PC market was modestly affected by the US economic situation, although there was no fundamental change in market conditions.

“The Europe, Middle East, and Africa (EMEA) and Asia/Pacific regions showed stronger than expected results, fueled by solid mobile PC growth across most countries. Latin America continues its rapid growth due to consumer spending,” she said in a statement.

In Gartner’s preliminary ranking of Q1 worldwide PC shipments, Hewlett-Packard extended its lead during Q1 as its worldwide market share increased to 18.3%, from 17.5% market share a year ago. However, HP’s regional performance was mixed: The company registered solid growth in EMEA and other regions, while it struggled to increase shipment volumes in the US market.

Dell registered its second consecutive quarter of double-digit growth in the worldwide market, Gartner said, with almost all regions growing higher than the regional average, thanks to rapid retail expansion, as well as channel business.

US PC shipments reached 15.2 million units in Q1, a 3% increase from Q1 2007, Gartner reported. “The preliminary results show that the price pressure during the quarter was greater than we expected,” Kitagawa said. “Indications are that the market felt the squeeze in the second half of the quarter. The US market is softening and this can potentially hasten downward price pressure and further intensify competition for the rest of 2008.”

Home mobile PC growth continued to drive US PC growth and, despite declining consumer confidence, US consumers did not put off mobile PC purchases as evidenced by solid mobile growth during Q1, which was stimulated in part by aggressive price cuts, she observed.

Gartner remarked that Dell extended its lead in the US PC market with its market share reaching 31.4%. Dell’s channel program, Partner Direct, launched in December 2007, started yielding dividends, as well as its retail expansion, while HP registered its lowest year-on-year US growth since the Compaq merger in 2003.

Meanwhile, with Acer's attempts to shift its target market from low-end to mid-range systems has adversely affected the company’s shipment volume. Gartner also said its early results show that Apple experienced the strongest growth rate among the top five vendors in the US market with strong retail sales and indications that the company had decent growth in the professional market, as well.

From IDC’s perspective, the market research company noted that as the general economic malaise currently affecting the US economy has begun to impact the local PC market. According to IDC, the US PC market slipped to a meager 3.5% year-over-year growth rate, but international markets more than compensated with the EMEA and Asia/Pacific regions coming in more than 2 points above forecast due to continued strength in developing countries.

As with previous quarters, IDC reminded that much of the growth came from the notebook markets -- in particular the consumer notebook segment in retail environments. "Notebook purchases are driving consumers beyond one PC per household to one PC per person and manufacturers are reacting by focusing their attention on customization and personalization," said Bob O’Donnell, VP of clients and displays research at IDC. "The ability to see and touch these devices in the retail environment and pick one out that matches a consumer’s unique style is a critical part of the buying process for consumers."

Microsoft’s release of Service Pack 1 for Windows Vista during the past quarter is expected to eventually raise the desire for businesses to deploy new PCs using Vista, but the impact in Q1 was very slight. Instead, IDC said the growth in Q1 continued to be driven by declining ASPs (average selling prices) and the general transition to mobile PCs among businesses and consumers.

On a regional basis, the US market struggled when compared to other regions, which IDC said is indicative of a major trend impacting the global PC market, wherein the US is becoming less of an influence and the emerging markets are growing in importance. Specifically, the US share of the worldwide market fell more than 2 points to 23% versus the same period last year, IDC said.

In terms of vendor rankings, IDC’s Q1 top five vendor ranking for worldwide PC shipments was topped by HP, followed by Dell, Acer, Lenovo, and Toshiba.

Specifically for the US, IDC’s Q1 top five vendor ranking for PC shipments was led by Dell, followed by HP, Acer, Apple, and Toshiba.

By: DocMemory
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