Worldwide PC shipments grew by 12.5% in the second quarter of 2007, according to IDC’s Worldwide Quarterly PC Tracker. Asia/Pacific (excluding Japan) returned as the fastest growing region with volume increasing more than 20% from the same quarter one year ago. A competitive market in the United States also helped boost overall growth with other regions expanding in line with or slightly behind forecasts. Channel expansion and competition for the consumer and small business segments added to the trend toward portable systems as key market drivers.

“This was another strong quarter that sets the stage for solid growth in the second half of 2007 and 2008,” said Loren Loverde, director of IDC’s Worldwide Quarterly PC Tracker, in the press release. “The success of HP and Acer as well as the rapid changes occurring at Dell in recent quarters underline just how dynamic the PC market is these days. Despite the temptation to simplify, the market is not just about replacing systems at the lowest cost. System design, customer service, channel coverage, and market expansion are all playing key roles in winning business.”

“The quarter ended better than expected, driven by intense channel activity and vendors’ strategic adjustments. The indirect channels, for instance, have proven to be an important source of growth, a trend likely to continue in coming quarters,” said David Daoud, manager of Personal Computing and PC Tracker Programs, in the press release. “New product announcements are likely to stimulate demand in the coming months. However, IDC warns that a return to double-digit growth in the U.S. market will be difficult to achieve.”

Regional Outlook

• The United States market accelerated to 7.2% growth following a slow second half of 2006 as aggressive competition and repositioning continues. The portables market remained strong, driven by consumer retail and channel activity. Although desktop shipments continued to contract, shipment volume was higher than anticipated. Dell remained the top vendor, though still losing ground as it restructures and faces rising competition. HP sustained growth of 26%, gaining share from a year ago. Toshiba and Acer each accelerated growth substantially.

• EMEA continued to grow at a solid, double-digit rate as portable adoption and renewals remained key drivers. Consumer and SMB segments continued to respond very positively to new products and attractive price points. Competition among the leading vendors, HP and Acer in particular, remained very active with channel outreach and product promotions. Desktop volume increased only minimally as the shift to portables continues and corporate refreshes remained moderate.

• In Japan, portable volume was flat from a year ago and a double-digit decline in desktops kept total market growth in negative territory. Commercial demand remained soft following the fiscal year-end in Q1 while summer promotions helped consumer growth improve from a very slow 2006.

• Asia/Pacific (excluding Japan) continued to accelerate with Portables growth at about 50% and with the Greater China region being a primary contributor to the regional total as vendors prepared their channels for summer promotions. In addition, nearly every country in the region posted double-digit year-on-year portables growth.

Vendor Highlights

• HP continued to experience strong growth in the United States and even faster growth abroad as the company further consolidated its lead with growth of more than 36% worldwide. The company saw strong results across all regions, but EMEA stood out with shipments increasing more than 40% year on year, up from roughly 25% in prior quarters. HP’s share of worldwide shipments rose to 19.3% from 19.0% in 1Q07 and less than 16% a year ago.

• Dell volume continued to decline as the company restructures itself amid aggressive competition. Commercial volume was relatively stable, while consumer shipments declined rapidly with Dell moving away from the low end. Although shipments were down overall, growth improved from prior quarters in most regions. The company also launched a number of initiatives designed to boost sales, including a distribution agreement with Walmart, the new Vostro brand for small businesses, and color portables for consumers.

• Lenovo had a very solid quarter with shipments increasing 22% in EMEA, up from 14% in Q1 and single-digits in prior quarters. Shipments in Asia/Pacific excluding Japan and the United States also increased substantially. The solid growth and passing of the Lunar New Year holidays (which produce a seasonal decline in Q1 volume) helped Lenovo regain third place in global shipments.

• Acer continued its rapid expansion in the Americas while posting strong gains in other regions as well. New retail and dealer partner agreements are quickly expanding the company’s access to the market, contributing to volume gains. Global shipments were up over 55% year on year with all regions growing by at least 30%.

• Toshiba had a strong quarter, with a big contribution from the United States. Shipments in the U.S. were up 50% from a year ago, becoming the company’s largest region. EMEA and Canada also saw solid gains while growth in Asia/Pacific and Latin America trailed the market. Overall growth moved above 20% again following a slow first quarter.

• Gateway shipments continued to decline in the face of rising competition. Volume was down almost 7% from a year ago, although this was slightly better than the first quarter.

Top 5 Vendors, Worldwide PC Shipments, Second Quarter 2007 (Preliminary)
(Units Shipments are in thousands)

Notes:
• IDC estimates prior to financial earnings reports.
• Shipments include shipments to distribution channels or end users. OEM sales are counted under the vendor/brand under which they are sold.
• PCs include Desktops, Notebooks, Ultra Portables, and x86 Servers.
• PCs do not include handhelds. Data for all vendors are reported for calendar periods.

Top 6 Vendors, United States PC Shipments, Second Quarter 2007 (Preliminary)
(Units Shipments are in thousands)

Notes:
• IDC estimates prior to financial earnings reports.
• Shipments include shipments to distribution channels or end users. OEM sales are counted under the vendor/brand under which they are sold.
• PCs include Desktops, Notebooks, Ultra Portables, and x86 Servers.
• PCs do not include handhelds. Data for all vendors are reported for calendar periods.

Source: IDC, July 18, 2007.

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