Global PC shipments still on an upward curve

PC market still growing, but price cuts having impact on EMEA, Gartner claims

Global PC shipments increased by 11 per cent to 54.9 million units in the second quarter of 2006, but price cuts have had a negative affect on the European market, according to analyst firm Gartner.

Prices declined in the quarter due to more aggressive pricing by Intel and AMD, and also CPU inventory clearance activity by Intel, Gartner claimed. The impact of the price decline affected the various regions in different ways – in the US and Asia/Pacific, the cuts boosted shipments, while in EMEA shipments were adversely impacted.

Charles Smulders, vice president of Gartner’s Client Computing Group said: “On a worldwide basis, large vendors continued to gain share at the expense of mid-tier vendors and system builders.

“The price cuts during the quarter undoubtedly helped the large vendors, as they were able to put more pricing pressure on the smaller players. Intel’s accelerated ramp on its new CPU lines will expose those vendors who have not invested enough in tools and processes to manage their supply chain,” he said.

In Q2 2006, the top five vendors accounted for nearly 50 per cent of the worldwide PC market and all grew faster than the overall industry average. Dell maintained its number one position in worldwide PC shipments, as it continued to grow much faster outside the United States. Hewlett-Packard (HP) continued to show strength in the worldwide market, backed by solid consumer growth, mainly in mature markets. Lenovo came third, Acer fourth and Toshiba fifth.

The consumer market experienced good growth in mobile PCs but was subdued by negative growth in the desk-based market. Price erosion will continue unabated and, combined with Intel’s early price cuts being matched by AMD, Gartner anticipates the market will reach double-digit growth in both segments.

After three quarters of positioning itself ahead of the market growth average, Hewlett-Packard’s results this quarter were below the market growth average, whereas Dell grew above the market growth average with good professional notebook growth. This was due in part to Dell’s aggressive pricing strategy on dual core products which also led to greater success in the SMB segments.