Friday, April 16, 2010

PC growth passes 24 percent - propelled by strong emerging market dynamics and improving business spending in Q1 2010

FRAMINGHAM, USA: The worldwide PC market grew 24.2 percent in the first quarter of 2010 (1Q10) compared to one year ago, when the market declined by almost 7 percent - the lowest growth since 2001.

According to the 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 percent or higher."

"The US 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 US market was not able to maintain the spike of growth (more than 24 percent) 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 percent, 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 percent 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 percent 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 US 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 percent was boosted by improved sequential performance and easy year-ago comparisons in the US 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 percent 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 percent 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 US also contributed strong results from the holiday season last year.

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