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Worldwide PC shipments surged ahead of expectations in the second quarter, marking the fourth consecutive quarter of positive growth and supporting cautious analyst speculation that the market has finally turned around.
"The market is definitely moving in the right direction," said Loren Loverde, director of IDC'sWorldwide Quarterly PC Tracker. "It seems we dodged a bullet with SARS, and the market remains cautious, but growth in the U.S. and Europe is ahead of schedule and we're still expecting increased business spending and continued portable adoption. There's a chance the results are driven by aggressive short term pricing, so I wouldn't throw caution to the wind, but these are very good results."
Those sentiments were shared by Charles Smulders, vice president of Gartner'scomputing platforms worldwide group, which released the results of its own survey.
"The PC industry performed better than expected, and suggests that market conditions are improving," Smulders said. "However, sustained improvement will depend on economic conditions and their effect on the business upgrade cycle. Recent Gartner IT Watch survey data confirms U.S. corporate budgets remain tight."
Gartner's preliminary results varied slightly from IDC's, finding that worldwide PC shipments reached 32.8 million units in the second quarter of 2003, a 10 percent increase over the 29.8 million units shipped that it recorded for the year-ago quarter. IDC, meanwhile, said worldwide PC shipments hit 33.2 million units, but said that was only a 7.6 percent increase over the 30.8 million units its numbers show were shipped in the year-ago quarter.
Either way, both firms agreed that the quarter represents the highest growth rate since the end of 2000.
Both research firms show that Dell led the pack in shipments. Gartner said Dell shipped 5.7 million PCs (including desktops, mobile PCs and IA32 servers) in the second quarter, giving it 29.5 percent growth and 17.6 percent share of the market. IDC found that Dell shipped 5.9 million units (including desktops, notebooks, ultra portables and standard Intel Architecture servers priced at less than $25,000), giving it 29 percent growth and a 17.8 percent share in the market.
"Dell had a very strong quarter, boosting year-on-year growth to nearly 29 percent worldwide and sustaining a growth premium versus the market of over 20 percent in the second quarter," IDC said. "Dell's performance was supported by strong international sales, and growth across form factors. The company's strategy of targeting key segments in specific geographies has proven successful and well executed."
The figures also show that Hewlett-Packard is making a strong play for the first place slot. Gartner found that HP (whose results merged HP and Compaq numbers for the first time) shipped 5.2 million units in the second quarter, giving it 12.1 percent growth and 16.1 percent share. IDC said HP shipped 5.3 million units, giving it 13.3 percent growth and 16.2 percent share.
"HP also had a strong quarter, growing faster than the market both in the U.S. and worldwide," IDC said. "The gains reflect growing consumer sales in response to aggressive pricing as well as some activity in the commercial segment. Consumer spending also contributed to strong results in EMEA."
HP was quick to point out that it is a close race between Dell and itself.
"The PC growth is good news for the industry," said Jim McDonnell, vice president of marketing for the HP Personal Systems Group. "Once again this quarter, the race continues to be a two-horse competition between HP and Dell — and notably the gap between the rest of the pack and industry leaders HP and Dell continues to grow."
He added, "The two companies are virtually neck and neck again, separated by just over 500,000 of the industry's more than 33 million units shipped worldwide during the quarter. That's less than two days worth of shipments over a 90-day period — in a real horse race, you would need a photo finish to judge the outcome."
IBM rounded out the top tier of sellers. Gartner said IBM shipped 2.1 million units worldwide, showing 13.4 percent growth and capturing 6.7 percent of the market. IDC also showed IBM shipping 2.1 million units, but said that represented 11.9 percent growth and a 6.6 percent cut of the market.
Gartner's analysts pointed out that IBM's shipment increase, in particular, is a good indication that the business segment of the market may be improving. IDC highlighted that IBM saw solid sales in its recently launched ThinkCenter line, as well as its portable PCs and wireless-enabled systems.
Both research firms slugged Fujitsu Siemens as the fourth place vendor. Gartner reported 1.3 million shipments, marking 10.8 percent growth and 4 percent market share, while IDC gave the firm 1.2 million shipments, signifying 7.1 percent growth and 3.8 percent market share.
"Fujitsu Siemens had a solid quarter, beating market growth in its key markets of Japan by nearly 9 percent and holding ground in Western Europe with solid portables shipments," IDC said.
The firms varied in their opinions on the fifth-place finisher. Gartner gave it to NEC, saying the firm recorded 1 million shipments, denoting a decline of 2.7 percent and a shrinkage of its share to 3.1 percent. However, IDC, put Toshiba in the fifth-place slot, saying it had 1 million shipments on 10.8 percent growth, giving it 3.1 percent share of the market.
Meanwhile, Gateway failed to make either top-five list.
"Although shipment and growth data are still being finalized, Gateway continues to face growing competition in key consumer and small business segments," IDC said. "The company's efforts to diversify its product offering may help profitability, but the broader consumer electronics market is already competitive, and the diversification is unlikely to boost PC volumes significantly."
Overall, Gartner and IDC both saw promising growth in the U.S. market.
Gartner said U.S. shipments surged 11.1 percent, boosted by the consumer and education segments.
"In the home market, competitive pricing and mobile PCs were important drivers," Smulders said. "Mobile PCs continued to be the hot item in the retail space."
IDC, meanwhile, said U.S. shipments grew by 8.1 percent, still ahead of forecasts, largely due to aggressive pricing. It noted that Dell share in the U.S. market grew from 25.6 percent in the year-ago quarter to 31.5 percent in the second quarter of 2003 on shipments of 3.7 million. HP grew from 15.2 percent share to 19.1 percent share, on shipments of 2.2 million.
"The consumer segment seems to have led growth, but the public sector was more resilient than expected, and commercial demand is showing signs of improvement," IDC said.
The firms agreed that all global regions showed positive growth compared to a year ago, with EMEA and Latin America both exceeding growth expectations. Gartner said Asia/Pacific came in below expectations, based primarily on the effects of SARS on business activity in China. However, IDC said Asia/Pacific beat forecasts, with major markets recovering from SARS more quickly than expected.
"Growth slipped only minimally from the first quarter and is expected to improve the rest of the year as the market moves beyond SARS and looks for growing export business."
However, IDC broke out Japan, noting that shipment growth there improved somewhat after a disappointing first quarter.
"Nevertheless, some of the improvement was due to an easy year-on-year comparison as the soccer World Cup distracted consumers from purchases while the market was suffering from export weaknesses in 2001 and 2002," IDC said. "The latest results reflect a slight improvement, but the market remains constrained."