PC shipments back on track in first quarter

Desktops and commercial customers are helping PC makers bounce back earlier in 2010 than initially thought.

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
Lenovo all-in-one desktop
Emerging markets and small businesses are showing higher demand for desktops in early 2010. Lenovo

The PC industry bounced back during the end of 2009, and was able to continue its momentum through the first quarter of 2010.

PC shipments rose 24 percent from the same quarter a year ago to 79.1 million units worldwide, according to IDC's Quarterly PC Tracker report, issued Wednesday. It's the second straight quarter of double-digit growth, and indicates the industry is on its way to recovery after a disastrous late 2008 and most of 2009.

"We had such a strong fourth quarter that there was a risk of having addressed the urgent demand, which was largely (coming from) consumers in the fourth quarter. Channels might have still had inventory or the holiday promotions having passed so consumers and small business buyers just wouldn't be buying as much" this quarter, said Loren Loverde, IDC analyst. "We normally expect a seasonal decline from Q4 to Q1 and this didn't happen."

Instead, it means retailers were able to sell the product they had on hand already, and they're still selling more. That's just the latest good news for PC makers. On Tuesday, Intel announced earnings that jumped 433 percent from the same quarter in 2009, thanks to strong demand for laptop chips.

Outside the world of laptop and desktop computers it seems consumers in general are feeling more optimistic about the economy, as evidenced by the early data on initial sales of the Apple iPad, as well as the continued strong sales of sophisticated--and sometimes pricey--smartphones. Apple said it sold 500,000 touchscreen tablets--that start at $500--in the first week. And smartphone makers, particularly Apple and RIM, saw a surge in sales of their devices at the end of 2009.

Laptops specifically continue to grow, the bigger surprise of the quarter was the growth in desktop PCs. Laptops have been outpacing desktops for a few years with consumers, and desktop aren't as popular in mature consumer markets like the U.S. and Japan. But emerging regions like China and India are ordering more desktops now. According to IDC desktops grew 7 percent during the quarter, while laptops grew 39 percent.

Commercial customers--including both small businesses and large enterprises--are also more likely to buy desktops. And after several quarters of stagnation, businesses appear ready to start spending on new PCs for employees.

"I think it's fair to say that we're in the early stages of commercial (rebound). What we saw over the last year or two was most of that spending was put on hold for other priorities and cash flow management," said Loverde. "Now we've got more optimism about growth."

That Windows 7 has been out in the market for several months also helps to encourage businesses to refresh their equipment. "It's still too early for enterprise (customers), but smaller business might be making purchases," Loverde said.

A tally of worldwide PC shipments by IDC shows that Hewlett-Packard maintained its lead as the largest vendor of PCs, though Acer is close behind. HP had 19.7 percent of the 79.1 million PCs shipped during the first quarter; Acer had 13.6 percent; Dell had 13.3 percent; Lenovo had 8.8 percent; and Toshiba 5.8 percent.

In just the U.S. market, HP is also king: it had a 25.4 percent share of the 17.5 million PCs shipped to U.S. retail channels; Dell had 24.1 percent; Acer had 13.1 percent; Toshiba 8.6 percent; and Apple had 6.4 percent, according to IDC.

This post was updated at 3:45 p.m. PT.