PC Market Hits Pothole in Q4

The worldwide personal computer industry posted moderate gains for the year 2000, according to preliminary data from Gartner Group’s Dataquest Inc., which found slow growth during the fourth quarter of the year.

Worldwide PC shipments totaled 134.7 million units in 2000, an increase of 14.5 percent over 1999 shipments. PC shipments in the US grew 10.3 percent in 2000.

“The PC industry was hurt by a sluggish 2000 fourth quarter when worldwide PC shipments increased just 10 percent and US shipments increased 6.4 percent,” said Charles Smulders, principal analyst of Gartner Dataquest’s Computing Platform Worldwide group. “The downturn in growth is concrete evidence that saturation in key segments is playing an increasingly important role in overall market growth, with new shipments unable to mask the effects of economic cycles on replacement buying.”

The timing of the economic downturn at the tail end of 2000 was unfortunate for the PC industry because it coincided with the largest quarter for home PC sales, Smulders said. The preliminary data also point to a weak professional market.

Worldwide PC Vendor Unit Shipment Estimates for 2000
(Thousands of units)
Company 2000 1999 Growth
Shipments Market Share
Shipments Market Share
Compaq 17,203 12.8 15,870 13.5 8.4
Dell 14,536 10.8 11,459 9.7 26.9
Hewlett-Packard 10,237 7.6 7,600 6.5 34.7
IBM 9,162 6.8 9,331 7.9 -1.8
Gateway 5,110 3.8 4,745 4.0 7.7
Others 72,642 53.9 62,577 53.2 16.1
Total Market 134,738 100.0 117,626 100.00 14.5
Data includes desk-based PCs, mobile PCs, and PC servers
Source: Gartner Dataquest

Dell and Hewlett-Packard were the only top-tier vendors to experience growth rates above the industry average both worldwide and in the US. Some of Dell’s success was attributed to its aggressive pricing strategy during the quarter.

“While lower growth rates during the fourth quarter last year made for a disappointing quarter for the industry, it does help allay some of the fears of inventory overhang going into the first quarter of 2001, particularly in the US retail market,” Smulders said. “This is better news for the industry, both because it suggests that vendors were able to take some action to stem and reduce the build up evident in the early part of the quarter, and the anticipated sell off of excess finished goods’ impact on 2001 first quarter shipments should be less pronounced.”

According to the Employment Policy Foundation, 54.5 million US households own at least one computer, and by November of 2002, that number will rise to 68.2 million, nearly off of which will have Internet access.

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