Global PC Shipments Up, But Dell's Growth Slows

Global shipments increased to 50.4 million units from 45.7 million PCs during the same period a year ago, Gartner Inc. said. The analyst firm's report was similar to its competitor International Data Corp., which reported Friday that global shipments were up 10.9 percent. Gartner's number was 10.3 percent.

Market leader Dell Inc. saw its worldwide growth rate drop below 20 percent for the first time in 10 quarters, as U.S. companies spent less than expected on PCs, Gartner said. Dell's 13.7 percent growth rate, however, was enough to inch up its market share to 16.9 percent from 16.4 percent.

The shortfall in the U.S. market was made up by sales in Europe, the Middle East and Asia, Gartner analyst Charles Smulders said. Small businesses in Western Europe were the biggest contributor to the boost in shipments in the EMEA region.

"(EMEA shipments) brought worldwide numbers in line with expectations," Smulders said, adding that vendors dropped prices to stir up demand, and the strong Euro to the dollar also made PC prices attractive to small businesses.

In the U.S., corporations appeared to be at the tail end of their usual four-year replacement cycle, which means sales probably wouldn't pickup dramatically until around 2008, Smulders said. Corporations, educational institutions, small and midsize businesses and government accounted for 69 percent of PC sales in 2004, with consumers buying the rest.

IBM's decision to sell its PC unit to the Chinese company Lenovo probably had an impact on U.S. sales by giving corporate buyers a reason to delay purchases, even if only temporarily, Smulders said.

"When the company that invented the PC exits the market, it can be a little unnerving for buyers," the analyst said.

Dell's drop in growth rate was attributed to its dependence on the U.S. market. In addition, the company has said it's focusing on higher end PCs, which carry higher margins but fewer sales, than on low-end computers, Smulders said.

Nevertheless, Dell continued to grow faster than competitors and the market in general, the analyst said.

Worldwide, notebook sales continued to be very strong, while desktops continued to fall out of favor, Gartner said. Falling notebook prices was a major factor in the transition to portables from desktops.

In the U.S. market, the world's largest, Apple Computer Inc. moved into the fifth position, beating out Toshiba. Apple's shipments rose by more than 45 percent, driven by iMac and PowerBook sales, Gartner said. However, the research firm couldn't say what impact sales of Apple's iPod music player had on growth.

"It's difficult to correlate iPod sales with PC sales," Smulders said.

Apple's market share increased in the quarter to 3.7 percent from 2.6 percent a year ago.

Worldwide, the top vendors, in order from one to five, were Dell, Hewlett-Packard Co., IBM, Fujitsu/Fujitsu Siemens and Acer. In the U.S. market, they were Dell, HP, Gateway, IBM and Apple.

Gateway saw its shipments drop by 23.4 percent in the quarter, reflecting the company's dependence on the consumer market, Gartner said. The first is seasonally a weak consumer quarter.