The worldwide PC market continued its solid expansion in the first quarter of 2006 with year-on-year growth of 12.9% despite an expected decline from growth of 15.9% in 2005, according to IDC’s Worldwide Quarterly PC Tracker. Nearly all regions were inline or slightly ahead of forecasts for the first quarter, helping boost worldwide shipment growth for 1Q06 to 12.9%, slightly higher than IDC’s March forecast of 11.8%. Portable adoption remained a key trend in all regions and consumer growth appeared relatively strong following the holiday season.
HP and Gateway saw notable surges in growth in the first quarter while growth for Dell and Fujitsu Siemens slowed considerably – particularly in their core markets. HP appears to have benefited from channel efforts and aggressive pursuit of consumers while Gateway made gains in the public sector in addition to the consumer market. The field of leading vendors performed fairly well in the quarter with market performance inline or ahead of expectations, whereas Dell may have focused on profitability at the expense of volumes, especially in the United States.
“Market growth ahead of forecasts in almost all regions reflects continuing strong demand,” said Loren Loverde, director of IDC’s Worldwide Quarterly PC Tracker. “While this bodes well for the short term, Dell’s relatively slow growth may set the stage for more aggressive pricing in coming quarters. While this would help drive volumes, it would not help profitability.”
“The U.S. PC market was slightly lower than forecast with about 5.3% year-over-year growth versus a forecast of 6.7%, with both desktop and notebook PC shipments growing slightly slower than expected,” said Bob O’Donnell, vice president of Clients and Displays at IDC. “This quarter saw some important shifts in market share with HP and Gateway outperforming the market and gaining share, while Dell sales were relatively flat and Lenovo slipped out of the Top 5.”
Regional Outlook
— United States – Portable PC adoption and aggressive competition in the consumer segment kept the U.S. market afloat. Overall growth was slightly behind forecasts in mid-single digits. Commercial market growth, and consequently the growth of enterprise-oriented vendors Dell and Lenovo, slipped from recent quarters. In contrast, the consumer market benefited from an easy comparison to 1Q05 shipments with vendors such as HP gaining share.
— EMEA – As expected, the EMEA market maintained healthy growth at roughly 16% in the first quarter of 2006. The market continued to be driven by significant demand for portable PCs in the consumer and SMB segments, which helped maintain regional portable growth above 30% versus desktop growth of roughly 8%. Competitive pressure and aggressive pricing strategies continued to assist overall demand and in particular portable adoption across the region.
— Japan – Strong demand in both consumer and commercial segments helped bolster growth in the Japanese market. Growth slowed from 9% in 2005 as expected, but outpaced forecast growth of roughly 2% for the first quarter. The strong results may indicate more robust consumer demand going forward.
— Asia/Pacific (excluding Japan) – Although Lunar New Year celebrations contributed to a seasonal sequential decline in volume as expected, the region nevertheless maintained robust year-on-year growth of over 20% for the third consecutive quarter. Strong year-on-year growth in China and Korea, combined with continued demand in Thailand and the Philippines despite the political disruptions there, helped boost regional growth.
Vendor Highlights
— Dell – Dell remained the clear market leader with a share of 18.1% in the first quarter, although the company appeared to lose some momentum. First quarter growth of 10.2% worldwide was slightly behind the market while growth in the United States slowed notably to less than 1% from almost 9% in 4Q05 and double-digits for the prior two quarters (and fell behind the market for the first time). Corporate growth in the U.S. remained in double-digits while consumer and public sector shipments dipped from a strong fourth quarter. Outside the U.S., Dell performed much better with shipment growth of over 23% versus market growth around 16%. International markets jumped to over 48% of Dell’s shipments in the first quarter from 43% during 2005. Strong growth in Asia/Pacific, including Japan, PRC and India, as well as a strong showing in major markets in EMEA, helped boost Dell’s international results.
— HP – HP had a very strong quarter, growing nearly twice the market rate worldwide and almost three times the rate in the United States. The company grew shipments by double-digit rates in all regions with particularly strong performance in its largest regions – the United States, EMEA, and Asia/Pacific. It appears that the company’s efforts to boost volumes with channel partners are paying off.
— Lenovo – Lenovo again kept pace with the market while its geographic and segment focus changes as the integration of IBM’s PC division continues. Worldwide growth of nearly 11% in the first quarter was only slightly behind the overall market and just ahead of projections for commercial market growth in 1Q06. However, the company’s real strength was in Asia/Pacific, which represents over 50% of the company’s shipments, while performance in other regions was at least several points behind the market.
— Acer – Acer continued to grow at a rapid pace with worldwide shipments increasing more than 50% from a year ago. Growth in its largest market – EMEA – slowed somewhat although shipment growth in APeJ accelerated and expansion in the Americas continues to move relatively quickly.
— Fujitsu/Fujitsu Siemens – Although growth was not far behind market levels and the company expanded in some of its smaller geographies, growth in EMEA slowed considerably from nearly 30% in recent quarters to 11% in 1Q06. With EMEA representing roughly 60% of company shipments, this slowdown had a significant impact on overall growth.
— Gateway – Gateway appears reinvigorated as growth surged to over 44% in the first quarter. The company first saw significant positive growth following the acquisition of eMachines in the second quarter of 2005 with shipment increases approaching 30% year on year. Fourth quarter growth was slower than this pace, but the first quarter performance appears to have regained momentum and positions the company very well going forward.
— Toshiba – Toshiba saw solid double-digit gains continue in the first quarter. Although the company’s growth is roughly inline with overall portable market growth, Toshiba’s exclusive focus on this segment has translated to steady gains in share of total PC shipments.
— Apple – Growth of Apple systems slowed to single digits in the first quarter following a surge in growth during Q1 2005. The company has been growing at a rapid pace over the past year, benefiting from customer interest in its music business as well as new products, but the transition to Intel processors may have caused supply issues for Q1 2006. -0-
Top 5 Vendors, Worldwide PC Shipments, First Quarter 2006
(Preliminary)
(Units Shipments are in thousands)
| Q1 2006 Rank | Vendor | Q1 2006 Shipments | Market Share | Q1 2005 Shipments | Market Share | 1Q06/1Q05 Growth |
| 1 | Dell | 9,642 | 18.1% | 8,752 | 18.6% | 10.2% |
| 2 | HP | 8,702 | 16.4% | 7,121 | 15.1% | 22.2% |
| 3 | Lenovo | 3,423 | 6.4% | 975 | 2.1% | 251.3% |
| 4 | Acer | 2,900 | 5.5% | 1,879 | 4.0% | 54.3% |
| 5 | Fujitsu/Fujitsu Siemens | 2,332 | 4.4% | 2,129 | 4.5% | 9.5% |
| Others | 26,208 | 49.3% | 26,253 | 55.7% | -0.2% | |
| All Vendors | 53,207 | 100.0% | 47,109 | 100.0% | 12.9% | |
| 3 | Lenovo (Merged) | 3,423 | 6.4% | 3,086 | 6.5% | 10.9% |
Notes:
— Shipments include shipments to distribution channels or end users. OEM sales are counted under the vendor/brand under which they are sold.
— PCs include Desktop, Notebook, Ultra Portable, and x86 Servers.
— PCs do not include handhelds. Data for all vendors are reported for calendar periods.
— Data for Lenovo includes shipments for IBM PCD (including Desktop and Portable PCs and excluding x86 Servers and Personal Workstations) starting in 2Q05, and only Lenovo data for prior quarters. This reflects the legal status of the companies, which merged during the second quarter of 2005.
Source: IDC, April 19, 2006 -0-
Top 6 Vendors, U.S. PC Shipments, First Quarter 2006 (Preliminary)
(Units Shipments are in thousands)
| Q1 2006 Rank | Vendor | Q1 2006 Shipments | Market Share | Q1 2005 Shipments | Market Share | 1Q06/1Q05 Growth |
| 1 | Dell | 4,992 | 32.3% | 4,977 | 33.9% | 0.3% |
| 2 | HP | 3,075 | 19.9% | 2,656 | 18.1% | 15.8% |
| 3 | Gateway(1) | 1,230 | 8.0% | 830 | 5.7% | 48.2% |
| 4 | Toshiba(1) | 631 | 4.1% | 509 | 3.5% | 24.0% |
| 5 | Apple | 566 | 3.7% | 549 | 3.7% | 3.1% |
| 6 | Lenovo | 539 | 3.5% | 0 | 0.0% | N/A |
| Others | 4,412 | 28.6% | 5,150 | 35.1% | -14.3% | |
| All Vendors | 15,444 | 100.0% | 14,670 | 100.0% | 5.3% | |
| 6 | Lenovo (Merged) | 539 | 3.5% | 555 | 3.8% | -2.9% |
Notes:
— (1) IDC estimates for Gateway & Toshiba are prior to financial earnings reports.
— Shipments include shipments to distribution channels or end users. OEM sales are counted under the vendor/brand under which they are sold.
— PCs include Desktop, Notebook, Ultra Portable, and x86 Servers.
— PCs do not include handhelds. Data for all vendors are reported for calendar periods.
— Data for Lenovo includes shipments for IBM PCD (including Desktop and Portable PCs and excluding x86 Servers and Personal Workstations) starting in Q2 2005, and only Lenovo data for prior quarters. This reflects the legal status of the companies, which merged during the second quarter of 2005.
Source: IDC, April 19, 2006
IDC’s Worldwide Quarterly PC Tracker gathers PC market data in 55 countries by vendor, form factor, brand, processor brand and speed, sales channel and user segment. The research includes historical and forecast trend analysis as well as price band and installed base data.
For more information, or to subscribe to IDC’s Worldwide Quarterly PC Tracker, please contact Kathy Nagamine at 650-350-6423 or knagamine@idc.com. You may also contact IDC’s sales hotline at 508-988-7988 or email sales@idc.com.
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