PC shipments still strong in 2004 as Dell beats HP

The worldwide PC market finished 2004 on a strong note, with double-digit percentage growth for the year, according to research released Tuesday by IDC and Gartner Inc. But growth will slow in 2005 as consumers pull back from their frantic purchasing of the last few years, the companies said.

PC vendors shipped 177.5 million units during 2004, up 14.7 percent from the 154.7 million units shipped in 2003. This number represents the peak of a worldwide recovery from the decreasing shipments of 2001, IDC said.

Gartner’s figures were slightly different, due to the different methods used by the two research companies to measure the sales of PCs from various vendors. PC shipments increased by 11.8 percent in 2004 for a total of 189 million units, according to Gartner. IDC believes worldwide PC shipments will grow about 10 percent during 2005 and that growth will decrease the following year, it said. Business customers are in the middle of the replacement cycle that PC vendors have been anticipating for two years, but consumers have largely tapped themselves out after two years of keeping the PC market afloat amid slow business sales, IDC said.

That consumer weakness started to appear in the fourth quarter, said Charles Smulders, vice president of Gartner’s Computing Platforms Worldwide Group, in a press release.

In the fourth quarter, Dell Inc. edged out Hewlett-Packard Co. (HP) in what is usually a strong quarter for HP. Dell shipped 8.8 million units during the quarter to HP’s 8.2 million units. Dell also grew twice as fast as HP from the fourth quarter of 2003 to the same period in 2004, according to IDC.

Holiday purchases by consumers generally lift HP into the top spot worldwide during the fourth quarter. But the company did not show that strength in this quarter, increasing its shipments by only 9 percent compared to last year and losing market share to Dell, IDC said. Last week, HP appointed Vyomesh Joshi, the leader of its printer business, as head of a combined organization selling both printers and PCs.

IBM Corp. recently decided to get out of the PC business, selling its ThinkPad and ThinkCentre PCs to Lenovo Group Ltd. in December. That deal is expected to close in this year’s second quarter. In the fourth quarter, IBM was the third-ranked vendor in worldwide shipments, with 2.9 million units, according to IDC.

The IBM-Lenovo deal appeared to have an immediate impact on IBM’s shipments, with a dip in U.S. shipments noted as news of the deal spread, said Roger Kay, vice president of client computing with IDC. However, the company had largely recovered from that slight decline by the end of the year, he said.

Acer Inc. cracked the top five list of vendors worldwide on the strength of an excellent quarter in Europe, the Middle East, and Africa (EMEA). The company sent 70 percent of the 2.2 million units it shipped in the quarter to EMEA, and it posted the best worldwide year-over-year growth rate among the top five vendors with a 33 percent improvement in shipments over the fourth quarter of 2003, IDC said.

Fujitsu Ltd. and its Fujitsu-Siemens Computers (Holding) BV subsidiary fell to fifth place in the worldwide rankings with less than 2.1 million shipments in the quarter. Fujitsu had a strong quarter in Europe but did not grow as fast as Acer and is having problems with a difficult market in Japan, Kay said.

Gartner did not break out results for the fourth quarter. Dell led the market in 2004 with 31 million units shipped during the year, outselling HP by about 3.5 million units. The two companies were followed by IBM, Fujitsu/Fujitsu Siemens, and Acer. IDC ranked the five vendors the same way as Gartner for the full year.

In the U.S., Gateway Inc. and Apple Computer Inc. occupied the fourth and fifth spots in unit shipments, according to IDC. Gateway is starting to reap the benefits of a streamlined product lineup and lower pricing following its merger with eMachines, Kay said.

Apple’s runaway success with its iPod music player has led some analysts to predict that Apple will also see faster growth in its PC business. Company executives recently said that they didn’t have data that proved that theory, and Kay also believed that more data is needed before the “halo effect” caused by the iPod translates into iMac or Power Mac sales.

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