The worldwide PC market continued to grow at a healthy pace in the second quarter of 2006, although slow growth in Europe limited worldwide shipments to an increase of 9.7% year on year, according to IDC’s Worldwide Quarterly PC Tracker.
While overall growth remained strong, there were some unexpected twists in regional performance. Inventory from the first quarter and distractions from the World Cup significantly cut into European growth with shipments increasing by roughly 7% year on year compared to twice that the prior quarter and a forecast of 12%. Meanwhile, shipments in the United States increased by 6.7% on aggressive competition among the market leaders following slower growth the prior two quarters. Latin America and Asia/Pacific excluding Japan (APeJ) also saw strong growth in the quarter, while growth in Japan was slower than expected.
Acer continued to gain share worldwide while Fujitsu Siemens struggled in its core markets. Dell improved on its first quarter performance, growing U.S. shipments roughly in line with the market and gaining share worldwide. HP had another strong quarter in the United States, but the slow market in Europe constrained overall growth to 13% from more than 23% the prior quarter. Gateway and Apple also performed well with growth of roughly 16% in the U.S.
“We continue to see aggressive competition as the market transitions to a new phase,” said Loren Loverde, director of IDC’s Worldwide Quarterly PC Tracker, in the press release. “In addition to changing regional dynamics, we can expect to see heightened competition in the second half of the year as companies vie for growth. Aggressive competition between processor vendors and the delayed release of Windows Vista will contribute to the changes vendors face entering the next cycle in the PC market.”
“Manufacturers in the United States were very assertive in the second quarter and used low prices and portable adoption to collectively reverse sluggish growth trends from the previous six months,” said Richard Shim, senior analyst with IDC’s Personal Computing program, in the press release. “HP, Apple, and Gateway led the charge with double digit growth rates outpacing the industry average. Dell slightly lagged the market while maintaining its leadership position by a wide margin.”
Regional Outlook
• United States – Total shipments came in slightly ahead of forecasts. While portables growth remained strong, demand for desktops also made a significant contribution. Strong growth from HP and an improved performance from Dell also helped boost growth.
• EMEA – Slowing demand in Western Europe with the additional impact of the World Cup and increased inventory levels in Q1 contributed to constrain second quarter sales in EMEA. The shift to portables continued across the region, although growth of both desktops and portables declined notably from prior quarters.
• Japan – Despite optimism on the economic front, PC shipment growth continued to slow as commercial replacements decline and the consumer segment faces growing competition from other electronics such as flat-screen TVs.
• Asia/Pacific (excluding Japan) – Growth in APeJ continues at a rapid pace, fueled by China’s robust GDP growth and technology adoption. Other large markets such as India and South Korea grew slightly slower than expected, although robust growth in China more than compensated, keeping regional growth above 18%.
Vendor Highlights
• Apple shipments increased by double digits in the second quarter following a slow first quarter. Strong portable PC sales through its retail outlets had a significant impact with retail growing by 50% and portables by over 60% year on year. The strong growth reflects a successful transition to Intel-based systems – a critical transition for the company that sets the stage for future growth.
• Dell remained the clear market leader and gained worldwide market share despite facing tougher competition than in recent years. A strong performance in key international markets contributed as worldwide shipment growth was up incrementally from 10.2% in the first quarter to 10.9% year on year in the second quarter. Shipments to the United States, which represent more than half of Dell’s business, show strong sales in portables and in public sector sales, but grew slightly below the overall market.
• HP had another robust quarter, boosted by strong growth in the United States. The company managed second quarter growth of more than 15% in the U.S. market. Growth in EMEA slowed with the market, but strong U.S. demand and other international markets kept overall growth in double digits.
• Lenovo managed a nice recovery in the United States with shipments rising almost 6% year on year. Worldwide growth of nearly 13% was also positive – coming in ahead of Dell and roughly even with HP. However, essentially all of the growth continues to come from APeJ, while shipments in other regions decline.
• Acer continued to make steady gains across major regions. Worldwide shipment growth declined a bit from prior quarters, but remains the fastest of the top vendors. Growth in the company’s largest markets – EMEA and APeJ – was down from prior quarters, but continues at a multiple of the broader markets, and expansion in other regions continues at a rapid pace.
• Fujitsu/Fujitsu Siemens was hampered by the slowing European market. Worldwide shipments were flat from a year ago as continued slow growth in Japan was unable to compensate for a slight decline in Europe.
• Gateway had a strong quarter, with shipments growing by roughly 15% year on year. The United States dominated shipments and growth in the second quarter and overall growth slowed from a spike in the first quarter. However, this is the fifth consecutive quarter of double-digit gains for the company, representing a strong turnaround after refocusing its distribution channels.
Top 5 Vendors, Worldwide PC Shipments, Second Quarter 2006 (Preliminary) (Units Shipments are in thousands)
Notes:
• Shipments include shipments to distribution channels or end users. OEM sales are counted under the vendor/brand under which they are sold.
• PCs include Desktop, Notebook, Ultra Portable, and x86 Servers.
• PCs do not include handhelds. Data for all vendors are reported for calendar periods.
Source: IDC, July 19, 2006
Top 5 Vendors, U.S. PC Shipments, Second Quarter 2006 (Preliminary) (Units Shipments are in thousands)
Notes:
• IDC estimates for Gateway are 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 Desktop, Notebook, Ultra Portable, and x86 Servers.
• PCs do not include handhelds. Data for all vendors are reported for calendar periods.
Source: IDC, July 19, 2006
IDC’s Worldwide Quarterly PC Tracker gathers PC market data in 55 countries by vendor, form factor, brand, processor brand and speed, sales channel and user segment. The research includes historical and forecast trend analysis as well as price band and installed base data. http://www.idc.com/
Related articles:
Gartner: Apple Mac grabbed 4.6% U.S. market share in Q2 06 – July 19, 2006
“WHAAAAAAAAAAAAHHHHHHHHHHHHHHHHHH!!!!!!!!!!!!!!!
MacDailyNews is PICKING on us!!!!!!! WHAAAAAAAAAAAAAAHHHHHHHHHHHHH!!!!!
It’s not FUN around here anymore.
And we’re babies.
—>Exceptional response. I’m guessing an infantilism fetish perhaps?
No, I believe MDN are the babies in this case. Connor was interested in international market share numbers. I said that U.S. market share rose 0.3% (gartner)-0.4%(IDC) – preliminary results. Then I stated that I was *also* interested in the WW market share gains. Oh, I also mentioned that I was surprised by HP having that much growth and how their notebook designs have changed a lot from a year ago. Possibly stating facts is too much for them to handle? It seems so in this particular instance – why I have no idea. Keep up the good work shredding those documents MDN.
(c) Never confuse a Mac Fanboy with facts. They need to ignore them or their brains explode as they try to reconcile their view of the world with reality.
Fortunately when their brains explode it doesn’t leave too much mess since that organ in a Mac Fanboy is not too big to begin with.
I like my mac better now that market share is up!
If liking your mac is determined by mac market share…. um……………
Sincerely,
The Brainless Mac Fanboy
AAPL actually missed on the revenues. 4.4 billion or more in revenues were expected instead they only got 4.37 billion.
which is not bad but still a miss.
“If liking your mac is determined by mac market share…. um……………”
The comment goes way past Market Share. Every time Apple screws up, people defend Apple way past the level they would defend any other defective product. Every time Windows gets mentioned they trot out the same stale old views about how bad Windows is and how 95% of the world must be dumb for using it.
Wake Up. If things were as bad as Apple users thought in the Windows world, you wouldn’t be able to stop the stampede to the Mac.
But even with today’s numbers there’s no stampede. The news is better than a loss of market share, but hardly the carnage that many Fanboys were predicting.
To put it into perspective, Apple HP and Gateway have done about as well as each other in terms of percentage gain compared to their base. Or in absolute terms Gateway handily exceeded Apple, and HP whipped Apple’s butt. Heck even Dell, whose numbers were not great, grew by much more in absolute terms.
Many an Apple Fanboy will put this down in the case of Apple, to Apple’s brilliance, and in the case of Gateway and HP, to stupid people who don’t know any better buying Gateways and HPs.
Yet there’s nothing that sustains either position.
But the telling fact (note: fact not opinion) is that for all Apple’s changes, innovation, whatever, they’re not growing any faster than a staid old Windows box mover like Gateway or HP.
Add to that two quarters of negative iPod sales growth and the lowest ever year on year increase of iPod sales, it’s pretty clear the days of spectacular iPod sales growth are over. Perhaps with some new products they might have a great Christmas, But Apple would have to sell 23 million iPods this Christmas to match last Christmas’s year on year growth figures. How likely is that? Not very.
I wouldn’t say this quarter’s news is cause for a big celebration. The next few quarters will show how well Apple settles down with the Intel transition, and what trend of Intel Mac sales emerges, and whether iPod sales are good or bad over Christmas.
Did any of you read the article?
• Apple shipments increased by double digits in the second quarter following a slow first quarter. Strong portable PC sales through its retail outlets had a significant impact with retail growing by 50% and portables by over 60% year on year
That is reason for celebration right there.
DUH!
Multiple posts telling us to fix the link to the worldwide chart graphic were removed as we fixed the graphic in order to avoid confusion and keep to the topic of growing Mac market share. If some posts also contained other info or were mistakenly deleted, we apologize. Please repost.
Thank you.
So if I am understanding right, this means that a company (Apple) that is transitioning to new processor, while doing this is GAINING market share. If this is correct, I believe this is absolutely great news.
Facts, you stated that: “But the telling fact (note: fact not opinion) is that for all Apple’s changes, innovation, whatever, they’re not growing any faster than a staid old Windows box mover like Gateway or HP.”
Clearly, you did not read the table presented on the article as Apple was able to grow in the U.S. at a faster clip than Lenovo (much faster), Dell (much faster) and HP (a bit faster). Gateway was only a bit faster than Apple.
So, your facts are dispelled in the same article you are posting.
I do agree on many of the other points you make, but the market share analysis you did is bogus at least by what the table in the article presents. If you have other data than what is presented here, I would like to see it.
“• Apple shipments increased by double digits in the second quarter following a slow first quarter. Strong portable PC sales through its retail outlets had a significant impact with retail growing by 50% and portables by over 60% year on year
That is reason for celebration right there.
“
That’s great in RELATIVE terms, but when you look at it in ABSOLUTE terms, not so great. Apple found one statistic that looked good (Kinda like Photoshop filter benchmarks on the PPC)
In reality Apple is up about 0.3% in terms of share in the US market.
Worldwide it’s less. Sure that’s better then going down or staying the same. But if you published a headline which said
“Apple Market share increases 0.3% on the back of release of new Intel PCs”
Then NOBODY would be too impressed compared to phrasing that exact same statistic another way
“Apple sales increase by 12%”
Hmmm that’s much more impressive, if you’re dumb with no math skills and don’t understand that the two headlines are the same.
Then you go for the biggie. You look for one segment of the buisness which did well and say
“Sales thru our stores, in June, increased 50% compared to last June”
And what happened last June? Apple told everytbody that they were moving to Intel. What do you think THAT did to last June’s sales figures, Genius?
It’s a very USUAL situation when you have a new product introduction which was substantially pre-anticipated, especially when the old product has not been updated much for a very long time, there can be a lot of PENT UP DEMAND.
Then you get a hold off in sales in a previous quarter, and an increase in sales in the quarter in which the product is released. The numbers for the release quarter look better then normal, but they can represent a short term blip not a sustainable change.
Also it Still doesn’t change the fact that Apple did no better than Gateway or HP in terms of gains as a percentage of existing share.
So the interesting thing will be whether next quarter shows growth continuing, or just that a whole lot of Mac customers held off buying new machines until the Intel ones came out.
Anyway, it’ll be interesting to see what trend develops next quarter.
Stock, you stated “Also it Still doesn’t change the fact that Apple did no better than Gateway or HP in terms of gains as a percentage of existing share.”
What about Dell? Did Apple do better than Dell in terms of gains as a percentage of existing share? And Lenovo? Of course they did!
The reality is that Dell (and Lenovo) are rapidly losing market share (at least in the U.S.) and Gateway, Hewlett Packard AND Apple are capitalizing on this and rapidly growing their market share.
Infomercials – that’s meaningless. It takes (relatively) small change for Apple to make a large percentage change on a tiny number of sales, whereas it takes a huge change for Dell to make a small percentage change. It’s easy for Apple to find impressive percentages when their absolute performance is so unimpressive.
Which is it – 4.6% or 4.8% market share?
Reality Check, a percentage is a percentage is a percentage.
.10 out of 1 is 10%
100 out of 1,000 is 10%
1000 out of 100,000 is 10%
The percentage does not change simply because the denominator is larger. Which means that if you are having a higher percentage growth than your competitors you start eating at their share no matter how small your (or how large their) initial quantity is.
Year 0
You: 100 units (80% share)
Me: 25 units (20% share)
Year 1
You: 115.5 units (15.5% growth | 79.94% share)
Me: 29 units (16% growth | 20.06% share)
We both grew alot, but I grew a bit more than you. Therefore, I took a bit of share away from you. It does not matter that you sold 15.5 units more versus my only 4 units more. What matters is that percentage-wise I outgrew you which means I took market share away from you (no matter how miniscule).
Another way to look at is to say that in:
– Year 0 out of every 100 units that were sold people would choose your product 80% of the time.
– Year 1 out of every 100 units that were sold people would choose your product 79.94% of the time.
While the change is minimal, it is a positive change towards me and a negative change towards you.
Nobody believes that Apple will go from 4.4% market share to 10% share overnight (if ever), but for them any positive change, no matter how slight, is important.
“The reality is that Dell (and Lenovo) are rapidly losing market share (at least in the U.S.) and Gateway, Hewlett Packard AND Apple are capitalizing on this and rapidly growing their market share.”
Look at the numbers again.
The reality is that Dell’s share went up 0.2% worldwide, and down 0.1% in the USA.
Apple’s units went up by 105,000 in the USA.
Dell’s units went up by 326,000 in the USA.
So percentages aside, who grew more in absolute terms? Dell of course.
if you owned a lemonade stand and were selling lemonade at a nickel a glass, which would you rather do, sell 105 extra glasses, or 326 extra glasses? (Think about it for a minute, you probably need to).
Worldwide Dell gained share, albeit slightly.
But Dell’s 0.2% share gain, coupled with 10.9% growth corresponds to 982,000 units, or more units than Apple sold in the USA total!
Dell grew it’s number of actual sales by more PCS than Apple sells in the USA! They just got bigger by more than the whole size of Apple’s US PC sales! Yet Apple’s the one doing well and Dell’s in the toilet? On what planet?
Oh, I forgot, those percentages for Dell are small compared to Apple’s percentages. Clearly you don’t understand that a small percentage of a big number can be better than a large percentage of a small number.
How about I give you 100% of 10 dollars, and in return you give me 1% of a billion dollars. Sounds like a fair trade right? After all you’re getting back 99 percent more than what you have to give me…
Look at where according to IDC the share gains came from in the USA:
2.3% from “Others”
0.1% from Dell,
0.1% from Lenovo.
Look where they went TO:
1.5% to HP
0.5% to Gateway
0.4% to Apple.
Did Apple do well? Not compared to HP… All Hail HP, the new innovator in the PC industry…. Are you going to sell your Mac and buy an HP? Somehow I don’t think so.
Stock:
You negate your own point when you state both these things:
First statement:
“Look at where according to IDC the share gains came from in the USA:
2.3% from “Others”
0.1% from Dell,
0.1% from Lenovo.”
Second statement:
“How about I give you 100% of 10 dollars, and in return you give me 1% of a billion dollars. Sounds like a fair trade right? After all you’re getting back 99 percent more than what you have to give me…”
You see, you can’t tell me that 0.1% (or 1% as you actually state) of a billion is so significant and then turnaround and say that a loss of 0.1% of that same number is not a big deal to Dell or a big gain to Apple.
The problem with your argument is that you are trying to equate HP to really big, huge numbers (like a billion) and Apple to really, really, really, REALLY small numbers (like 10) when you should be smart enough to realize that the reality is that even Apple’s small number is still very, very, VERY big.
For example, let us split the billion dollars you brought to the table, but we do it in the exact same share as what the U.S. market share for computer makers was this past quarter.
Fact: Like Dell, he gets 34.1% of it (or 341 million dollars)
You: Like HP, you get 20.1% of it (or 201 million dollars)
Me: Like Apple, I get 4.8% of it (or 48 million dollars)
And so on
No doubt, your share is bigger and growing as fast or faster than mine, but Fact’s share while growing is actually not growing as fast as yours or mine. You and me are happy, Fact is not. Not because he is not growing, but because he knows that eventually (in a long time) we will catch up to him (or he’ll fall back down to us) because we are growing faster than he is.
And you know what hurts Fact the most? That by the time you catch up to him (or he falls down to us) the overall pie will be worth more like 2 billion dollars instead of the 1 billion we all started with. Which means that:
Fact: Will have 28% of 2 billion (or 560 million)
You: Will have 28.1% of 2 billion (or 562 million)
Me: Will have 6.6% of 2 billion (or 132 million)
And so on.
If Fact had kept his growth up as fast as ours, he would have somewhere around 39% of that 2 billion.
Anyway, long story short. A percentage is a percentage is a percentage and you can’t change that Fact. In particular, when it is used to reflect growth of a growing market.
Finally, let me reverse your offering to this and then you can tell me whether the absolutes matter:
I’ll take the 100% of 10 you are offering me and give you your 1% of one billion as long as you change it from money to the chance that we WON’T suffer a debilitating illness which combined with a cancer of the lung makes the last two years of our lives…well…not much of one.
A 10 in 10 (100%) chance that I won’t die heinously
A 1,000,000 in 1,000,000,000 chance that you will die heinously
I’ll take my 100% over your 1% anytime of the day. I’m sure you would too.
If only life were that simple.
“The problem with your argument is that you are trying to equate HP to really big, huge numbers (like a billion) and Apple to really, really, really, REALLY small numbers (like 10) when you should be smart enough to realize that the reality is that even Apple’s small number is still very, very, VERY big.”
No I’m just using very clear examples to help educate you.
Which is better? to sell 326,000 more units or to sell 105,000 more units. Forget the percentages, clearly one is better than the other.
Secondly there is no huge defection from Dell, in fact worldwide there’s small growth.
And sure Dell would probably like to grow more, but hey, when you have that much of the market in a mature commodity market, further growth is much harder to achieve.
When you’re a bit player, scratching out 12% growth (0r 0.3% absolute growth) is quite easy.
The numbers make it quite clear that it’s mostly the “Other” category that’s loosing.
“
Finally, let me reverse your offering to this and then you can tell me whether the absolutes matter:
A 10 in 10 (100%) chance that I won’t die heinously
A 1,000,000 in 1,000,000,000 chance that you will die heinously
I’ll take my 100% over your 1% anytime of the day. I’m sure you would too.”
Again, you’re just repeating your original confusion.
Lets reverse the offering properly, not ignorantly and wrongly.
The right mathematical comparison in the bet as phrased is whether I’d take the bet that with 100% chance you and ten of your friends will die heinously, or that in a room of 1000 people I’d be one of ten who die heinously.
When set up as I originally proposed, the exchange (if you have no choice but to take one of the options) is a no brainer.
“If only life were that simple.”
If only you weren’t.
Stock, you win. You clearly had me when you resorted to calling me ignorant that really drove your point home and made it clear to me that you are a superior human being.
Way to go Stock. All hail the mighty non-ignorant Stock.
Because I’m so ignorant and you are so much smarter than me, I’m going to give this one more shot so that you can once again instruct me:
– The only way 326K is better than 105K when it comes to GROWTH is if you assume that we both started off in the exact same position.
– Lets say this past quarter only 431K units were sold 326 to you and 105 to me. You get 75.6% share of sales for that quarter.
– The same quarter, but a year ago, 428K units were sold 324 to you and 104 to me. You had 77.4% of sales that quarter.
– In both instances, you clearly, sold more overall units than me, over three times more to be exact. Way to go you!
– Absolute gains: You: 2 units, Me: 1 unit. Again, you handily beat me in absolute numbers. Way to go you!
– Share gains: You: down by 0.8% to 75.6%, Me: up by 0.8% to 24.4%.
How is it possible for you to kick my butt in every absolute number, but still lose market share? Because as I tried to illustrate earlier, the overall pie is growing and even though you are selling more than me I’m gaining more of the new sales relative to where I started than you in the now bigger pie.
In previous quarters, I would only capture 24.4% of the sales in the pie and you would capture 75.6% of them. Now, I’m capturing 33% (1 of 3) of every new sale that increases the pie. That means that if we kept that pace at some point in the future (way, way, way in the future) your overall market share would come down to 66.6666% and mine would come up to 33.333%.
– So you see, even though you beat me in every Absolute category, you are still losing market share. Slowly, yes very slowly, but you are still losing market share.
– One final question on this matter, if you sell 326,000 units but only make $1 on each and I sell 105,000 units but make $5 on each, who really is better off?
Finally, I did not get into this conversation because I want to defend Apple or anybody else for that matter…I could give two flying monkeys about how these companies do and while I think Apple’s systems are superior for my personal use, I do love what HP does with their servers and I frequently buy their system (just recommended and purchased four xw4300 workstations two weeks ago for a client).
On the same token, I’m not a huge fan of Dell, but I recommended and purchased two PowerEdge 850 servers in the past month, because they are hella cheap compared to HP’s offerings. At the same time, I recommended and purchased three iMacs for some clients that had never ever used a Mac.
Long story short, the only reason I got into this is because most people in this board, don’t seem to understand that percentage growth is a good thing, no matter how miniscule it may be. If I’m ignorant for understanding this, then it is my understanding that the smart people in this world are not very smart no matter how good they are at calling us (ignorant) people names.
I think we bored everyone else with our rants, if you want to keep this conversation going off-line (or is that on-line) you can e-mail me at ragarcia@imagingmedicalsolutions.com
Arguments, shmarguments. It’s simple. Apple has 4.8% share of US market. Almost nothing worldwide. After 5 years of the almighty OS X. Big whup. All I can say to the Mac fanboys who constantly bleat the “million-kazillion viruses on Winblows” line:
BWAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAAAAAA !!!!!
😀
Nobody disputes loosing market share is bad.
One flaw in your argument is the position that Dell is actually loosing market share.
Their worldwide share went up.
The second part is a belief that Apple’s gains are impressive.
But lets take a simple model. Lets assume Apple’s worldwide share is 2% Lets assume they grow their share by 12% every year, and that growth is compounded. Those are very generous assumptions, because today’s numbers show a total sales (not share) growth in the US of 12% and an increase in share as a percentage of existing share at around 7%, and Apple does much better in the US than elsewhere. But anyway, lets use those first numbers.
lets say Dell’s share keeps growing as it is today, starting at 19.2% and growing compounded at the measly rate of 1.1%.
In this situation, it takes Apple 23 YEARS to match Dell’s share. Using the more realistic number of 7% it takes 41 YEARS.
Add to that as companies get bigger, growth slows. Which just means in reality it takes even longer.
And you can bet that in that time, some intervening event will change those assumptions.
So you can see why I’m not particularly excited by Apple’s growth.
They’ve got to shift growth to MUCH higher numbers for Apple to start looking exciting. And not that they can’t. They just haven’t yet.
“One final question on this matter, if you sell 326,000 units but only make $1 on each and I sell 105,000 units but make $5 on each, who really is better off?”
Easy, You because I make 326,000 and you make 525,0000.
But if we’re talking Apple Vs Dell, in reality Apple’s net profit per unit is not 5x Dell’s. but if your point is there’s a lot more to valuing a company then just looking at market share, or how many units it sold, I agree.
“most people in this board, don’t seem to understand that percentage growth is a good thing, no matter how miniscule it may be. “
I agree, most know a few stock buzzwords but are almost completely financially illiterate.
They let their emotions about the product cloud their judgement about the quality of an investment. (Their analysis extends as far as: Apple makes a good product therefore Apple is a good investment). I can think of dozens of companies which make great products, yet are priced such that they’re not an attractive investment. Conversely there are many who make unexciting products which are great investments.