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No quick fix in sight for PC slump

The next couple of years will be lean ones in the PC industry, research firm IDC predicted on Wednesday. IDC revised its 2001 forecast for overall PC shipments, lowering projections for the United States and worldwide.

The next couple of years will be lean ones in the PC industry, research firm IDC predicted on Wednesday. IDC revised its 2001 forecast for overall PC shipments, lowering projections for the United States and worldwide.

For the first time, US shipments are expected to decline from the preceding year.

"This is an indication of a PC industry recession that will last for the next two years due to anemic sales, followed by a modest recovery in 2003," said IDC analyst Roger Kay.

The report also included first-quarter market-share figures for PC manufacturers. For the first time, Hewlett-Packard took the top spot for sales of home desktop PCs worldwide, beating out the likes of Compaq Computer, Gateway and Fujitsu-Siemens. But HP's new position was not a hands-down victory for the Palo Alto, Calif.-based company, said Kay.

"Home desktops are the least profitable segment, and when you look closely at the numbers, they actually lost share compared to the previous year," Kay said.

The consumer desktop PC market is tightening up, Kay added, with the sales numbers that separate the players shrinking compared with those of previous years.

HP had 10.3 percent of the worldwide consumer market in the first quarter, with Compaq close behind with 9.3 percent. In the preceding quarter, HP had 11.3 percent and Compaq had 11.9 percent. Gateway was third with 6.7 percent of the market, and Fujitsu-Siemens trailed with 5.2 percent.

Dell, which was fifth in the consumer desktop PC market with 4.8 percent market share, maintains the overall market share lead for PCs, but that badge may be more of a burden in the coming years.

After initial forecasts of 2.2 percent growth in US PC shipments for 2001 compared with 2000, IDC lowered the projection to a decline of 6.3 percent. US shipments should pick up in 2002, with growth expected to be about 4.6 percent compared with 2001 shipments.

Particularly slow sales in the second half will be mainly responsible for the decline in US shipments. Typically, the third and fourth quarters bring in strong sales because of back-to-school and holiday sales, but this year they are expected to be weaker than in previous years.

Kay blamed weak consumer spending for the grim second half. US sales of consumer PCs are expected to drop 17.3 percent this year.

Worldwide shipment projections were also adjusted from 10.3 percent growth to 5.8 percent and will be strongly affected by the fluctuating US market. Additionally, a softening European PC market and slowing growth in the Japanese market are expected to hurt worldwide shipments.