IDC: Weak US consumer PC sales deflate global market

Slowing consumer demand and a softening business climate in the United States have led to disappointing PC sales, according to a report released Monday by research and consulting company International Data Corp (IDC).

Worldwide sales rang up at 36.7 million units in the fourth quarter of 2000, down 0.3 per cent over the same period in 1999, and a 3.6 per cent drop from the third quarter of 2000, IDC said.

While numbers were better in emerging economies in Asia and elsewhere, overall the figures suggest the PC market has reached saturation much sooner than industry experts expected, said Roger Kay, manager of IDC’s PC program.

“I think that at one point, not very long ago, we thought that PC penetration in U.S. households would reach 99 or 98 per cent, like telephones and televisions. And I think we don’t believe that anymore.”

He said PC sales are likely over time to make room for alternative devices for Internet access, although those devices have yet to make major inroads in the U.S. market.

“In anticipation, people are not buying the other things. They’re thinking, I don’t really want to buy a PC, because maybe I’ll do better with one of those cool screen things.”

Compaq Computer Corp. kept its place as the number-one vendor of PCs worldwide, with a market share of 13.6 per cent last quarter, despite fourth quarter sales that grew only 4.2 per cent over the same period in 1999. Dell Computer Corp. remained in second place, with 10 per cent of global sales, but robust growth of 30.9 per cent for the quarter. Hewlett-Packard Co. was third, with 7.4 per cent market share, and growth of 18.5 per cent. A close fourth went to IBM Corp., with 7.4 per cent market share and 7.9 per cent growth; and Fujitsu-Siemens Computers BV rounded up the top five, selling five per cent of the world’s PCs and racking up 11.3 per cent growth.

In the United States, Dell led the pack with a market share of 16.9 per cent, boasting growth of 32.5 per cent for the quarter. Compaq slipped to second place, with a market share of 16.2 per cent, and sales shrinking 5.3 per cent. Hewlett-Packard Co. came in third, with 10.3 per cent of the U.S. market and growth of 20.8 per cent. Gateway Inc. held fourth place, at 9.2 per cent market share, despite a 6.8 per cent drop in sales. And IBM was the number-five seller, holding 5.6 per cent of the market, and growing sales 7.2 per cent.

European PC sales, as measured by the U.K. research firm Context Information Services, rose 6.9 per cent in the fourth quarter over the same period in 1999. While there are few signs of a U.S.-style economic slowdown in Europe, the PC market may be reaching saturation on the continent more quickly, the company said in a statement Monday. Non-PC devices like interactive television and Internet-enabled mobile phones may be fulfilling consumers’ needs, Context added.

IDC is a subsidiary of International Data Group Inc., IDG News Service’s parent company, and can be reached in Framingham, Mass., at Context, in London, is at