U.S. PC Market 'Sluggish' In Tough Economic Times - InformationWeek
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7/17/2008
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U.S. PC Market 'Sluggish' In Tough Economic Times

Dell remained the top computer maker in the U.S. in terms of shipments, with a growth rate in the second quarter far exceeding the industry rate.

The U.S. PC market in the second quarter lagged behind the rest of the world, as tough economic times started to take its toll despite price cuts from computer makers, two market research firms reported Wednesday.

Globally, PC shipments were strong, rising 15.3% over the second quarter last year to 70.6 million units, according to IDC. Preliminary numbers from rival Gartner pegged growth at 16% to 71.9 million units.

In the United States, however, growth was in the low single digits, with IDC reporting an increase of 3.6% and Gartner 4.2%. Both numbers, however, were slightly higher than the year-to-year increase reported by both firms in the first quarter of the year.

"As expected, the U.S. market had a sluggish performance, with growth in low single-digits due to budgetary constraints among both consumers and businesses," IDC researcher David Daoud said in a statement.

Despite the tough sales environment, some vendors, particularly Dell, executed well, Daoud said. Nevertheless, "given the current economic fundamentals, demand could remain depressed in the coming quarters if economic pressures continue, even with sustained price decreases," he said.

Indeed, price drops in notebooks was a key contributor to the strength of the PC market worldwide, along with product upgrades and fresh designs. The price cuts, however, had an impact on vendors' revenues.

"Mobile PCs continued to lead unit growth across all regions as the average selling price of mobile PCs declined sharply relative to desk-based PC [average selling prices]," Gartner analyst Mika Kitagawa said in a statement. "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 region."

Dell remained the top computer maker in the U.S. in terms of shipments, with a growth rate in the second quarter far exceeding the industry rate. IDC said Dell shipped 12.1% more units than a year ago, and Garter reported 11.9%. Dell's market share was 32%. No. 2 Hewlett-Packard had about a 25% market share.

The firms differed on which vendor was third. Gartner said Apple was No. 3 with a growth rate of slightly more than 38%, while IDC listed the Mac maker fourth with a growth rate of nearly 32%. Acer came in third in IDC's rankings and fourth in Gartner's. Both analyst firms had Toshiba in fifth place.

Both market researchers had the same global rankings. HP continues to lead the pack, followed by Dell, Acer, Lenovo and Toshiba, respectively.

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