PC shipment growth in U.S. slow, healthy everywhere else

Notebooks continue to drive PC growth and Dell continues its comeback, according to IDC's quarterly report.

Erica Ogg Former Staff writer, CNET News
Erica Ogg is a CNET News reporter who covers Apple, HP, Dell, and other PC makers, as well as the consumer electronics industry. She's also one of the hosts of CNET News' Daily Podcast. In her non-work life, she's a history geek, a loyal Dodgers fan, and a mac-and-cheese connoisseur.
Erica Ogg
3 min read

The U.S. 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 7 percent growth for the U.S. market, shipments inched up 3.5 percent, half what IDC was anticipating.

Eee PC
The fascination with low-cost portable PCs, like the Asus Eee PC pictured here, is driving down the cost of PCs everywhere. Erica Ogg/CNET News.com

"The main issue is the economic situation in the U.S.," said Doug Bell, PC analyst for IDC. "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 percent to roughly 70 million units. That's two percentage points higher than anticipated.

Increased growth in the EMEA region (Europe, Middle East, and Africa) compensated for the U.S. shortcomings, however. Like the U.S., 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. "With all major vendors putting resources into low-cost PCs, we're just starting to see a handful of offerings," said Bell. "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 5 PC vendors remained in their same positions (HP, Dell, Acer, Lenovo, and Toshiba), and all grew faster than the total market. Hewlett-Packard grew 17.4 percent, but that was the lowest growth rate of the top 5. Dell, which is in the midst of a comeback since its disastrous 2007, saw its shipments rise 21.6 percent over last year, while Acer was once again the growth leader at 66 percent. 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 percent drop from the same quarter a year ago, which IDC said is due to weaker Gateway-branded products.

It looks like Dell is beginning to get its ducks in a row, as this is the second straight quarter the Texas PC maker has shown positive growth. "To have this kind of growth in the U.S. is a good sign for them. It points to their new retail strategy and overall shift toward portables," said Bell.

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 U.S. PC market due to the economy."