The worldwide PC market is growing at just 3.5 per cent because of slow sale in the US and western Europe, new research has shown.
Even more dramatically, the US PC market has shrunk for the first time in seven years as a result of the country's general economic slowdown.
The survey, carried out by analyst Gartner Dataquest, found that US sales fell by 3.5 per cent for the first quarter compared with the same period last year.
Todd Kort, Gartner analyst, said part of the problem was that PC replacement cycles have been extended as cash-strapped companies look to cut costs.
"There is a perceived loss of personal wealth because of stock market valuations. This is especially noticeable in the US, where everybody who needs a PC at work already has one and companies are not so willing to replace them," he said.
However, this news does not seem to have affected Dell, which became the world's largest PC maker in Q1. The vendor enjoyed 34 per cent worldwide growth in shipments. This gave it a 12.8 per cent market share, up from 9.9 per cent a year earlier and beating rival Compaq, which has a 12.1 per cent market share.
In contrast, struggling PC maker Gateway reported unexpectedly large Q1 losses of $503m (£349m), caused by restructuring and poor market conditions, the company claimed. This compares with a profit of $120m for the same period last year, while turnover dropped 15 per cent to $2.03bn.
PC chip vendors were also badly hit. Intel managed to beat lowered analyst expectations. It reported Q1 profits of $1.1bn, but this was down 64 per cent from last year. Turnover fell 16 per cent to $6.7bn.
Rival AMD also failed to match up to last year's figures, reporting a profit of $124.8m, down from $189.3m for the same period last year. The company's turnover rose 9 per cent to $1.19bn.
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