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News : International Last Updated: Apr 24, 2009 - 5:31:05 PM


Worldwide PC Market grew 16% in second quarter of 2008; Post Olympic blues unlikely to hit China's PC industry
By Finfacts Team
Jul 25, 2008 - 7:13:22 AM

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Worldwide PC shipments reached 71.9 million units in the second quarter of 2008, a 16 percent increase from the second quarter of 2007, according to preliminary results by US IT research firm Gartner. In a separate report, Gartner says because of China’s massive economy, the Olympic Games are expected to have limited impact on China’s PC market.  Analysts said a post Olympics slowdown is unlikely as PC penetration is still low in many small cities and towns, so there are many opportunities to drive PC shipments in the country.

"Mobile PCs continued to lead unit growth across all regions as the average selling price (ASP) of mobile PCs declined sharply relative to desk-based PC ASPs," said Mika Kitagawa, Principal Analyst for Gartner's Client Computing Markets Group. "Economic uncertainties have hit PC revenues, resulting in steep ASP declines, especially in markets such as the United States and the Europe, Middle East, and Africa (EMEA) region. The industry could ultimately see a significant wave of consolidation if stronger vendors continue to press their pricing advantage."

HP continued to maintain the No. 1 position with its worldwide PC shipment market share totaling 18.1 percent in the second quarter of 2008 (see Table 1). HP's growth rate exceeded the industry average in the worldwide market, and its growth rate was little above the industry average in the

Dell had another strong quarter with worldwide PC shipments increasing 21.9 percent in the second quarter of 2008 and its market share reaching 15.6 percent. The company's growth was fueled by its expansion into retail and other indirect channels. Preliminary results show Dell achieved over 40 percent year-over-year growth in mobile shipments for two consecutive quarters.

Table 1
Preliminary Worldwide PC Vendor Unit Shipment Estimates for 2Q08 (Thousands of Units)


Company

2Q08 Shipments

2Q08 Market Share (%)

2Q07 Shipments

2Q07 Market Share (%)

2Q08-2Q07 Growth (%)

HP

13,028

18.1

11,129

18.0

17.1

Dell

11,204

15.6

9,190

14.8

21.9

Acer

6,749

9.4

5,676

9.2

18.9

Lenovo

5,580

7.8

4,888

7.9

14.2

Toshiba

3,137

4.4

2,428

3.9

29.2

Others

32,157

44.8

28,647

46.2

12.3

Total

71,855

100.0

61,957

100.0

16.0

Note: Data includes desk-based PCs, mobile PCs and X86 servers.
Source: Gartner (July 2008)

PC shipments in the United States reached 16.5 million units in the second quarter of 2008, a 4.2 percent increase from the same period last year.  PC shipments actually accelerated during the quarter, despite continuing  economic woes. However, this acceleration appears to have been achieved at the expense of revenues as vendors appear to have cut prices in response to those woes.

"Home mobile PCs continue to have momentum in the  market. However, ASP declines were greater here than in other segments. The retail space was a harsh pricing environment during the quarter," Kitagawa said. "US professional units look to have been affected by tightening IT budgets as  business responded to growing economic uncertainty. Desk-based PCs gained traction among some professional users. Because desk-based PC deployment costs are still lower than that of mobile PCs, desk-based PCs provide a less expensive option for these buyers with tighter budgets."

Several mini-notebook PCs were introduced in the US market during the second quarter. However, this platform is still emerging and did not significantly contribute to overall shipment growth. Preliminary data shows the mini-notebook segment accounted for less than 3 percent of US mobile PC shipments.

In the  PC market, Dell continued to be the market leader with PC shipments accounting for 31.9 percent of the  market in the second quarter of 2008 (see Table 2). HP's growth rate was slightly ahead of the  average, and it appears HP's issues around inventory were resolved in the quarter. Apple's PC shipments grew 38.1 percent in the quarter. The home PC segment continued to be the strongest driver for Apple, as well as sales into the education segment.

Table 2
Preliminary  PC Vendor Unit Shipment Estimates for 2Q08 (Thousands of Units
)


Company

2Q08 Shipments

2Q08 Market Share (%)

2Q07 Shipments

2Q07 Market Share (%)

2Q08-2Q07 Growth (%)

Dell

5,254

31.9

4,697

29.7

11.9

HP

4,166

25.3

3,944

24.9

5.6

Apple

1,397

8.5

1,011

6.4

38.1

Acer

1,331

8.1

1,680

10.6

-20.8

Toshiba

907

5.5

882

5.6

2.8

Others

3,437

20.8

3,607

22.8

-4.7

Total

16,491

100.0

15,821

100.0

4.2

Note: Data includes desk-based PCs, mobile PCs and X86 servers. Acer data includes Gateway's consumer shipments and Packard Bell shipments.
Source: Gartner (July 2008)

PC shipments in EMEA (Europe, Middle East and Africa) reached 23.1 million units in the second quarter of 2008, a 23.5 percent increase from the same period last year. The strong shipment growth was linked to the decline in ASPs, especially in consumer mobile PCs. Some of the ASP declines are also an attempt by vendors to shift increasing inventory levels in retail channels. Shipment growth was strong across all countries, with the emerging markets of Eastern Europe and the Middle East and Africa still exhibiting the strongest increases. The strength of the mobile market continued; demand for notebooks remained very strong with growth over 40 percent.

In Asia/Pacific, PC shipments totaled 20.1 million units, up 18.1 percent from the second quarter of last year. In the professional market, there was not a significant slowdown in PC purchases as replacements and capital investments continued, benefiting multinational vendors such as HP, Dell and Lenovo. Mobile PC shipments grew 45.6 percent in the quarter.

PC shipments in Latin America grew 23.2 percent in the second quarter of 2008, as shipments in the region reached 7 million units. White boxes are gaining new momentum with support by AMD, Intel and Microsoft. Notebook PCs posted 55 percent growth in the quarter, while desk-based systems grew at an estimated 10 percent.

In Japan, PC shipments reached 3.6 million units, an 8.2 percent increase from the same period last year. Mobile PCs grew at a high single-digit to a low teen-digit rate, while desk-based PCs showed low single-digit growth. Replacement demand for commercial mobile PCs in large enterprises and sales of $500 mini-notebooks were two of the growth accelerators for the second quarter of 2008.

Post Olympic blues unlikely to hit China's PC industry

With total Olympic investment approaching US$40 billion, accounting for 1.2 percent of China's GDP, a report by China-based Gartner analysts Simon Ye and Eileen He said the August event will have a lesser impact on China than it had on the host countries of recent Olympics. This conclusion is partly explained by the fact that China is already preparing to host the Shanghai World Expo and the Asian Games in 2010.

“The Beijing Olympics will slightly influence PC shipments in the short-term instead of dramatically driving demand,” said Simon Ye, Principal Research Analyst at Gartner. “However, the Olympic Games provide a great opportunity for PC vendors to gain long-term returns by brand building. The long-term impact of the Olympics on the PC market will be in pushing IT infrastructure development in China.”

According to the report Olympic Games to Boost China’s PC Market Somewhat, the Olympics have generated important business opportunities in the construction industry through the building and upgrading of sports stadiums and other facilities, and also in service industries.

“The latest scientific and technological developments will be widely applied in building, installing and improving venues and facilities. As basic hardware infrastructure, PCs will be widely used to upgrade the application level, and this will promote the technological progress of related industries,” said Ye.

According to Gartner, PC shipments in the first half of 2008 are in line with forecasts and China will continue to maintain double-digit growth through 2012.

“We believe the visible impact of the Olympic Games will last for four to five months, from the torch relay which started in May in China, and continue until one month after the event closes at the end of August,” said Ye. “The games themselves will have no influence on the PC market after the first quarter of 2009. Balancing all the positive and negative factors, as well as indicators such as population, PC penetration rate, increased tourism and promotions, we believe that the Olympic Games will contribute about 1.5 percent of growth to the 21.9 percent growth expected in 2008, and 0.2 percent of growth to the 21.3 percent forecast for the first quarter of 2009.”

According to Ye, the factors driving China's PC market are the low PC penetration rates in many small cities and towns, high interest in PCs from China's younger generation and the fact that PCs are more affordable than ever before.  Although inflation soared in 2008, the average income in China increased accordingly. PC prices are dropping and high inflation is actually stimulating PC purchases.

"PCs are tied tightly with people's daily life and work,” Ye said. “Internet surfing, gaming and on-line entertainment have become popular leisure activities, while millions of small and mid-size businesses are emerging, with the PC being their main business tool."

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