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US no longer king of the PC?
As emerging markets move into the fray…

By Erica Ogg

Published: Thursday 17 April 2008

The US PC market is beginning to have less influence on the global market, according to IDC's Worldwide Quarterly PC Tracker.

Though it had previously projected seven per cent growth for the US market, shipments inched up just 3.5 per cent - half what IDC anticipated.

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Doug Bell, PC analyst for IDC, said: "The main issue is the economic situation in the US. It was the only region really impacted by the recession scare."

Corporate IT budgets are showing that cautious approach, he noted. Spending on IT hardware is being delayed to the second half of this year or early next year, or at least tightened. Though Microsoft finally released Vista Service Pack 1 this quarter, it had less of an impact than anticipated but could begin to convince businesses to upgrade next quarter.

The worldwide market is a different story. In the first quarter of 2008, shipments of PCs actually exceeded expectations, growing 14.6 per cent to roughly 70 million units. That's two percentage points higher than anticipated.

Increased growth in the EMEA region compensated for the US shortcomings, however. Like the US, buyers in the region are moving toward more inexpensive portable PCs, particularly in emerging markets where many consumers are making their first PC purchase.

In good news for buyers, the average selling price of PCs is continuing to drop, due to the new market of low-cost PCs, like the Asus Eee PC and Everex Cloudbook. The volume of low-cost PCs shipping is still minimal but it's growing. Bell said: "With all major vendors putting resources into low-cost PCs, we're just starting to see a handful of offerings. It's unclear how large that market actually is because we really only have one or two products to base it on."

The world's top five PC vendors remained in their same positions (HP, Dell, Acer, Lenovo and Toshiba), and all grew faster than the total market. HP grew 17.4 per cent but that was the lowest growth rate of the top five. Dell, which is in the midst of a comeback since a bad 2007, saw its shipments rise 21.6 per cent over last year.

Acer was once again the growth leader at 66 per cent. This is the second quarter in which its purchase of Gateway and Packard Bell have counted toward its total shipments and the combined company's total actually resulted in a 20 per cent drop from the same quarter a year ago, which IDC said is due to weaker Gateway-branded products.

For Dell, this is the second straight quarter it has shown positive growth. Bell said: "To have this kind of growth in the US is a good sign for them. It points to their new retail strategy and overall shift toward portables."

As far as market leader HP, its impressive growth of the last year has been tempered slightly by market conditions. "They had such a great 2007, the economy kind of caught up to them. HP is a great example of [what's happened to] the US PC market due to the economy," said Bell.