IDC Forecasts Increased PC Sales

EDP Weekly's IT Monitor, Sept 14, 1998

During Second Half Of 1998

Unit volume in the worldwide PC market this quarter is expected to grow year-on-year 11 percent, according to a just released forecast by International Data Corp. The mixed, but modest growth reflects a "warming" of a global market, which remains dampened by economic problems in the Asia/Pacific region and Russia, IDC says.

IDC now estimates that vendor shipments will grow 12.2 percent in the second half of 1998 with total year growth at 11 percent. Global volume increased 9.6 percent during the first half of the year.

"The inventory problems that plagued the first half of the year have been largely erased and we expect the market to perform better in the next six months with improved demand for low-cost and portable PCs," says Bruce Stephen, IDC group vice president of worldwide PC research. "However, while some market signals are better, IDC is still concerned about the spread of global economic problems and the attendant problems on PC demand."

Western Europe continues to be a market bright spot with unit growth of 16 percent expected this quarter, driven by heightened interest in the Internet, low-cost PCs as well as greater focus on the region by major global brands.

US growth this quarter is pegged at 14 percent based on continued strength of the low-cost PC market, healthy consumer demand and a more vibrant portable computer segment.

As in the first two quarters of 1998, Asia/Pacific (excluding Japan) is forecast to post negative (-3 percent) growth this quarter. The region's economic woes have stifled PC demand in many areas, and the region is expected to show negative growth of nearly two percent for the entire year. The gloomy growth picture in Japan is expected to improve a bit this quarter with unit volume up about two percent over the prior year, after Q2 unit shipments dropped 14 percent. For the total year, unit volume in Japan is expected to decline four percent.

IDC believes the shift toward lower prices and more efficient business models favors the largest vendors, who have broader product lines and geographical scope.

The greatest growth rates in Q3 unit shipments will fall to Apple, predicts IDC, which is posting a strong product lineup headed up by the hot-selling iMac.

Dell Computer is also enjoying impressive growth across the spectrum of product and customer segments as well as many geographies.

Dell's chief rival, Compaq, should also turn in a much better quarter as the company returns to higher factory shipment growth, especially in commercial desktops. Compaq's consumer business also looks very strong.

Share gains will likely be enjoyed by Hewlett-Packard, Gateway, and Toshiba (based on strong US portable shipments), IDC estimates. n