The U.S. and worldwide PC markets both suffered from a decline in shipments in 2001, according to preliminary figures from Gartner Dataquest, marking only the second time that’s ever happened.
Worldwide PC shipments totaled 128 million units in 2001, a 4.6 percent decline from 2000. PC shipments in the United States reached 44 million units, an 11.1 percent decline from the previous year. The last time the PC industry experienced such a difficult year was 1985, when worldwide PC shipments declined 2.3 percent, and U.S. PC shipments dropped 21.8 percent.
“Economic conditions combined with saturation issues in developed markets continue to impact PC market growth rates. Performance over delivery on the PC platform is allowing existing users to postpone PC upgrades,” said Charles Smulders, vice president of Gartner Dataquest’s Computing Platforms Worldwide group. “Preliminary indications show that, in the fourth quarter, we saw no return to buying in the Fortune 500 market, but a slightly better than expected performance in the consumer market.”
All of the top-tier vendors experienced double-digit declines worldwide in 2001, except for Dell, which grew 18.3 percent and surpassed Compaq to become the No. 1 vendor based on shipments. Dell’s market share increased to 24.5 percent in the U.S. market. Even with the proposed merger of Compaq and Hewlett-Packard, Dell would still be the No. 1 vendor based on shipments since Compaq and HP accounted for 22.5 percent of U.S. PC shipments in 2001.
“The result of the mismatch in supply and demand has been falling average selling prices, increasing margin pressure and a reduction in industry headcount as operating expenses were brought in line with the new business environment. Dell led the price reductions in the first quarter of 2001, leaving its competitors faced with the choice of following its lead or face major share losses,” said Martin Reynolds, vice president and research fellow for Gartner.
Gartner Dataquest expects that five out of the eight regional markets will show a year-over-year decline in the fourth quarter of 2001. Those regions are the United States, Western Europe, Japan, Canada and Latin America. Asia-Pacific, Central and Eastern Europe, and Middle East and Africa are expected to show modest growth.
There is better news on the horizon, if only because it can’t get much worse. Gartner Dataquest analysts said the current estimates are for worldwide PC shipments to decline 4 percent in the first quarter of 2002, but finish the year with a growth rate of 4 percent.
“While there is a mood of optimism in the industry, having made it through the bloodbath that was 2001, evidence for an immediate improvement in the first quarter of 2002 is far from clear,” Smulders said. “On the positive side, it does not appear that the market is getting worse. We do not expect to see a significant upturn in growth until the fourth quarter of 2002. This based on an economic upturn in the second half of the year.”
Research by International Data Corp. (IDC), found better-than-expected results for the PC industry from the holiday season. Worldwide PC shipments declined by 6.7 percent year on year in the fourth quarter, but grew sequentially by 16.9 percent to 34.2 million. In the third quarter, IDC said shipments fell 13.4 percent year on year. The healthy sequential growth provides a better indicator of the market’s performance, and paints a better picture, as it’s only slightly behind the average fourth-quarter sequential growth rate (from 1995 through 2000) of 19.8 percent.
“Hard times persist in the PC market, but vendors are working diligently to stimulate growth and the outlook has started to improve in the United States and Europe,” said Loren Loverde, director of IDC’s Worldwide Quarterly PC Tracker. “We don’t expect a rapid turnaround, but the seeds of recovery are being sown. Depending on the economic environment, growth in the PC market may pick up more rapidly toward the end of the year.”
IDC found that Asia-Pacific, excluding Japan, was the only region to sustain shipment growth from a year ago. The Japanese market continued to suffer from a deteriorating economy, with double-digit declines projected for the next few quarters. The market in Europe remained soft, with continued weakness in the corporate segment. Small business and consumer were the most active segments in Europe and continued to shift toward portable systems.
Shipments in the United States continued to decline year on year for the fourth quarter, falling 10.1 percent, but beating expectations. Sequential growth reached 6.1 percent, largely fueled by home buying.
“U.S. consumers finally pulled out some of the stops in the fourth quarter,” said Roger Kay, director of Client Computing at IDC. “After four quarters of subdued buying, consumers in the United States ended the year with a burst of activity, particularly in retail.”
|2001 Worldwide PC Vendor Unit Shipments
(Thousands of units)
|Source: Gartner Dataquest|
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