PC Growth Passes 24%

The worldwide PC market grew 24.2% in the first quarter of 2010 (1Q10) compared to one year ago, when the market declined by almost 7% – the lowest growth since 2001. According to the International Data Corporation (IDC) Worldwide Quarterly PC Tracker, both Desktop and Portable PC shipments exceeded expectations, with solid growth rates driven by sustained consumer demand and renewed commercial buying. The year-over-year gain in Desktop PCs reverses a series of quarterly declines that began in 3Q08. IDC attributes the renewed growth to continued recovery in emerging markets, improved business sentiments, and growth of specialized designs like All-in-One PCs.

“The strong first quarter builds on the fourth quarter rebound and shows rising confidence in the PC supply chain and commercial client base along with persistent demand from consumers,” said Loren Loverde, vice president, IDC Worldwide Trackers. “The commercial gains are a cornerstone of market rebound that we’ve been expecting and are now seeing in the data. Despite continued strengthening of commercial demand and solid consumer and emerging market results, year-on-year growth is likely to slow in coming quarters as year-ago comparisons get more difficult. This is part of an expected recovery trend that should include strong second quarter performance and lift growth for the year to 15% or higher.”

“The U.S. PC market exhibited encouraging signs of recovery in the first quarter. While part of this growth is a correction from a dismal 1Q09, some of it was driven by new PC refresh projects in the commercial markets. This is in addition to ongoing consumer appetite for more mobile devices as price points remain attractive and the multi-device per user environment expands,” said Andrew Hanson, research analyst with IDC’s Worldwide Quarterly PC Tracker. “Going forward, we expect tremendous activity from the supply side around product innovation and new form factors and designs, which are likely to drive interest among consumers. As such, we remain optimistic about PC growth this year and next, but caution that sustainable growth in the PC space will also require sustained economic growth.”

Regional Outlook

• United States -“ as expected, the U.S. market was not able to maintain the spike of growth (more than 24%) seen in 4Q09, but momentum from the holiday season continued, resulting in stronger than expected sales across both form factors. Steadily improved business spending, as well as growing interest in niche Desktop segments, yielded a strong Desktop quarter.

• Europe, Middle East, Africa (EMEA) – recorded a strong first quarter as CEMA continues to recover, with Portable PC sales in particular returning to strong double-digit growth. Western Europe continues to enjoy strong demand for Portable PCs and a very competitive consumer market, while increasing business demand also boosted shipments. The PC market in EMEA was able to avoid some of the risk of economic concerns, and growth was aided by particularly low sales in early 2009.

• Japan -“ saw yearly growth of 16.6%, partly as a result of comparisons with severe conditions a year ago. However, consumer Notebooks along with major projects in the public sector helped drive growth, coupled with some renewed commercial activities.

• Asia/Pacific (excluding Japan) -“ Despite a seasonally low quarter due to the Lunar New Year holidays, the region gained over 33% compared to a year ago – coming in 1% above forecast. China and consumer notebooks remain the clear drivers, while sustained political rallies in Thailand posed challenges.

Vendor Outlook

• HP -“ benefited from a solid performance in the channel. The vendor grew nearly 20% over the past year. Its focus in emerging markets paid off especially strong in Asia/Pacific (excluding Japan) and Latin America, while it also saw a rebound in EMEA as U.S. growth stabilized after a huge fourth quarter.

• Acer -“ continued to capitalize on the demand for its value-oriented product line and channel reach to make marked gains across both mature and emerging regions. Growth of more than 42% was boosted by improved sequential performance and easy year-ago comparisons in the U.S. and EMEA.

• Dell -“ also saw gains in emerging regions and rebounded in EMEA, with growth boosted by slow sales a year ago. Dell grew just over 21% year over year, in part from to improving business demand.

• Lenovo -“ saw the greatest improvement among the top vendors. The company continued to capitalize on its advantage in Asia/Pacific (excluding Japan) and emerging markets. The renewed focus after restructuring, channel expansion, and commercial sales accelerated growth from an already very strong fourth quarter to more than 58% year on year in 1Q10.

• Toshiba -“ saw above market performance in all regions except EMEA. Notebook demand was especially strong in emerging regions, but the U.S. also contributed strong results from the holiday season last year.

Top 5 Vendors, Worldwide PC Shipments, First Quarter 2010 (Preliminary)
(Units Shipments are in thousands)
Rank	Vendor	1Q10 Shipments	Market Share	1Q09 Shipments	Market Share	1Q10/1Q09 Growth
1	HP	15,596	19.7%	13,004	20.4%	19.9%
2	Acer	10,766	13.6%	7,555	11.9%	42.5%
3	Dell	10,498	13.3%	8,668	13.6%	21.1%
4	Lenovo	6,997	8.8%	4,419	6.9%	58.3%
5	Toshiba	4,609	5.8%	3,562	5.6%	29.4%
	Others	30,669	38.8%	26,527	41.6%	15.6%
	All Vendors	79,134	100.0%	63,736	100.0%	24.2%
Source: IDC Worldwide Quarterly PC Tracker, April 14, 2010

Top 5 Vendors, United States PC Shipments, First Quarter 2010 (Preliminary)
(Units Shipments are in thousands)
Rank		Vendor		1Q10 Shipments		Market Share		1Q09 Shipments		Market Share		1Q10/1Q09 Growth
1		HP		4,453		25.4%		4,130		27.5%		7.8%
2		Dell		4,220		24.1%		3,925		26.2%		7.5%
3		Acer Group		2,298		13.1%		1,576		10.5%		45.8%
4		Toshiba		1,506		8.6%		1,008		6.7%		49.4%
5		Apple		1,130		6.4%		1,043		7.0%		8.3%
		Others		3,936		22.4%		3,324		22.2%		18.4%
		All Vendors		17,542		100.0%		15,007		100.0%		16.9%
Source: IDC Worldwide Quarterly PC Tracker, April 14, 2010