PC shipment growth slows

PC shipments in Singapore grew 2% in the last quarter of 2000 despite a four percent decrease year-on-year, according to preliminary results from Dataquest Inc.

SINGAPORE - Personal computer (PC) shipments in the Singapore market in the fourth quarter of 2000 grew two per cent over the third quarter and decreased four per cent year-on-year, according to preliminary results from Dataquest Inc., a unit of Gartner Group, Inc.

"The availability of systems with processing speeds of over 1GHz failed to entice the market," said Lillian Tay, senior analyst at Gartner Dataquest. "At the same time, efforts made by vendors to reduce the prices of PCs with processing speeds below 1GHz came too late in the last few weeks of December 2000. Other inhibitors which pervaded the market include a slowing US economy and poor stock market performance, which created a cautious buying environment over the previous year."

"However, the growth potential for Asia Pacific (APAC) is still very strong. During the crash in 1997 to 1998, cost cutting ventures made many organisations in APAC very lean," said Ian Bertram, Regional Director and principal analyst for Gartner's Dataquest Computers and Peripherals in APAC.

He added that the consumer penetration rate in APAC as a whole is as low as two per cent, and over 90 per cent of businesses in APAC are SMEs, whose businesses are still not fully computerised. Leaving leaving much room for further PC growth.

Because of slowed growth during the fourth quarter of 2000, the worldwide personal computer industry posted moderate gains for the year. Worldwide PC shipments totaled 134.7 million units in 2000, an increase of 14.5 per cent over 1999 shipments (see Table 1). PC shipments in the United States grew 10.3 per cent in 2000.

"The PC industry was hurt by a sluggish 2000 fourth quarter when worldwide PC shipments increased just 10 per cent and U.S. shipments increased 6.4 per cent," said Charles Smulders, principal analyst of Gartner Dataquest's Computing Platform Worldwide group. "

The downturn in growth is concrete evidence that saturation in key segments is playing an increasingly important role in overall market growth, with new shipments unable to mask the effects of economic cycles on replacement buying.

Table 1
Preliminary Worldwide PC Vendor Unit Shipment Estimates for 2000 (Thousands of Units)

Company 2000 Shipments 2000 Market Share (%) 1999 Shipments 1999 Market Share (%)
Compaq 17,203 12.8 15,870 13.5
Dell 14,536 10.8 11,459 9.7
Hewlett-Packard 10,237 7.6 7,600 6.5
IBM 9,162 6.8 9,331 7.9
NEC 5,848 4.3 6,045 5.1
Gateway 5,110 3.8 4,745 4.0
Others 72,642 53.9 62,577 53.2
Total Market 134,738 100.0 117,626 100.0
Note: Data includes desk-based PCs, mobile PCs and PC servers.
Source: Gartner Dataquest (January 2001)

Dell and HP were the only top-tier vendors to experience growth rates above the industry average both worldwide and in the United States (see Tables 1 and 2).

According to Gartner Dataquest analysts, some of Dell's success was attributed to its aggressive pricing strategy during the quarter, while HP continued to leverage on its strong consumer franchise and supportive retail channel.

Table 2
Preliminary U.S. PC Vendor Unit Shipment Estimates for 2000 (Thousands of Units)

Company 2000 Shipments 2000 Market Share (%) 1999 Shipments 1999 Market Share (%)
Dell 9,430 19.1 7,263 16.2
Compaq 7,615 15.4 7,234 16.1
Hewlett-Packard 5,641 11.4 3,939 8.8
Gateway 4,271 8.6 4,021 9.0
IBM 2,674 5.4 3,290 7.3
Others 19,800 40.1 19,065 42.5
Total Market 49,432 100.0 44,811 100.0
Note: Data includes desk-based PCs, mobile PCs and PC servers.
Source: Gartner Dataquest (January 2001)

"While lower growth rates during the fourth quarter last year made for a disappointing quarter for the industry, it does help allay some of the fears of inventory overhang going into the first quarter of 2001, particularly in the U.S. retail market," Mr. Smulders said.

"This is better news for the industry, both because it suggests that vendors were able to take some action to stem and reduce the build up evident in the early part of the quarter, and the anticipated sell off of excess finished goods' impact on 2001 first quarter shipments should be less pronounced."

These results are preliminary. Final statistics will be available to clients of Gartner Dataquest's PC Quarterly Statistics Worldwide by Region program. To subscribe to this program, call 800-419-DATA, or 408-468-8009.

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