GartnerGroup's Dataquest Says Worldwide PC Market Surpasses 26 Percent Growth in Second Quarter 1999 - Industry Trend or Event

Edge: Work-Group Computing Report, August 2, 1999

The personal computer industry received a boost in the second quarter of 1999 as worldwide PC shipments grew 26.4 percent over the second quarter of 1998, primarily because of lower system prices, economic recovery, and the Internet, according to preliminary statistics by Dataquest Inc., a unit of Gartner Group, Inc. (NYSE:IT). All regions of the world experienced strong PC shipment growth during the second quarter.

"Demand in Asia/Pacific was driven by a return in business confidence together with Internet-related consumer PC demand," said Charles Smulders, senior industry analyst for Dataquest's Personal Computers Worldwide program. "In the European market, seasonal factors in the German market may contribute to lower growth, but early indications are that the United Kingdom and France have performed well across both the professional and consumer segments. The Latin America market also did well as the Brazilian market shows signs of recovering from the exchange rate crisis in January and continued strength in Mexico."

All of the top-tier vendors experienced worldwide shipment growth of more than 30 percent over the second quarter of 1998 (see Table 1). Dell and IBM experienced the strongest year-over-year worldwide growth with increases of 50 and 47 percent, respectively.

Table 1
Preliminary Worldwide PC Vendor Unit Shipment Estimates for Second
Quarter 1999

(Thousands of Units)
              Q2/99 Q2/99 Market     Q2/98 Q2/98 Market Growth
Company      Shipments    Share (%) Shipments    Share (%)    (%)
Compaq           3,499         13.8     2,633         13.1   32.9
Dell             2,586         10.2     1,721          8.6   50.3
IBM              2,229          8.8     1,515          7.6   47.1
Hewlett-Packard  1,587          6.3     1,153          5.8   37.7
Gateway            995          3.9       730          3.6   36.2
Others          14,437         57.0    12,282         61.3   17.5
Total Market    25,332        100.0    20,034        100.0   26.4

Note: Tables are PCs only (desktop, deskside, notebook, ultraportable, laptop, and transportable). Server-marketed PCs are not included. Source: Dataquest (July 1999)

However, during the second quarter of last year, some of the leading vendors scaled back shipments into the channel as they focused on reducing the channel inventory buildup that had occurred over the previous quarter. As a result, shipment growth in the second quarter of 1999 looks higher than real end-user demand. This channel inventory issue had the greatest impact on the U.S. PC market, where shipments increased nearly 29 percent over the second quarter of 1999 (see Table 2).

"The key success factors for vendors are business execution and, increasingly, customer relationship management," Mr. Smulders said. "During the quarter, traditional indirect vendors were increasingly endorsing customer choice strategies, including direct Web selling and direct salesforce activity, particularly in the U.S. market."

Table 2
Preliminary U.S. PC Vendor Unit Shipment Estimates for Second
Quarter 1999
(Thousands of Units)
                Q2/99 Q2/99 Market     Q2/98 Q2/98 Market Growth
Company     Shipments    Share (%) Shipments    Share (%)    (%)
Compaq          1,679         16.8     1,109         14.2   51.5
Dell            1,646         16.4     1,090         14.0   51.0
Gateway           845          8.4       619          8.0   36.5
IBM               841          8.4       493          6.3   70.6
Hewlett-Packard   817          8.2       567          7.3   44.1
Others          4,180         41.8     3,904         50.2    7.1
Total Market   10,007        100.0     7,781        100.0   28.6

Note: Tables are PCs only (desktop, deskside, notebook, ultraportable, laptop, and transportable). Server-marketed PCs are not included. Source: Dataquest (July 1999)

These results are preliminary at this time. Final statistics will be available soon to clients of Dataquest's PC Quarterly Statistics Worldwide by Region program. This program offers a comprehensive and timely picture of the worldwide PC market, allowing product planning, distribution, marketing, and sales organizations to keep abreast of key issues and their future implications around the globe. More information on this program is available on Dataquest's Web site at http://www.dataquest.com/dq/static/offer/programs/pqrgwwds19981130.html.> To subscribe to this program, please call 800-419-DATA, or 408-468-8009. More information about Dataquest's programs, descriptions of recent research reports, and full text of press releases can be found on the Internet at http://www.dataquest.com.

GartnerGroup's Dataquest is the recognized leader in providing the high-technology and financial communities with market intelligence for the semiconductor, computer systems and peripherals, communications, document management, software, and services sectors of the global information technology industry.