PC Market Returns To Positive Growth in Line with Expectations, Though Gains Remain Small, According to IDC

FRAMINGHAM, Mass.--(BUSINESS WIRE)--Worldwide PC shipments increased 2.6% in the second quarter of 2011 (2Q11), according to the International Data Corporation (IDC) Worldwide Quarterly PC Tracker. The results are just short of IDC's May projections for 2.9% growth and represent a combination of a hangover from the more than 20% growth in the first half of 2010 as well as competition from smartphones, other consumer products and pressure from lackluster economic conditions. As in 1Q11, the United States and Western Europe were among the weaker regions, reflecting constrained demand in more mature markets, while emerging regions - particularly Latin America and Asia/Pacific (excluding Japan) - fared better.

"These preliminary results continue to reflect pressure from competing consumer and business products as well as cautious spending," said Jay Chou, senior research analyst with IDC's Worldwide Quarterly PC Tracker. "Nevertheless, product refreshes and promotions in the second half of the year as well as easier year-ago data should boost growth in the second half of the year."

"The U.S. PC market continued to contract in 2Q11, largely as a result of three factors. The first is an ongoing contraction in the Mini Notebook (Netbook) market and related inventories. The second is the impact of 2Q10's difficult-to-sustain 12% growth. And third, demand has softened as corporate buyers continue to focus on increasing share of their IT budget in new IT solutions such as cloud and virtualization, and consumer interest shifts to media tablets," says Rajani Singh, research analyst, United States Quarterly PC Tracker. "Given the weakness of 2H10, we expect a better market environment in 2H11 with mid-single digit growth rates in the third quarter's back to school and fourth quarter's holiday season."

Regional Outlook

• United States – With a decline of 4.2% year over year, the market was still downcast from a combination of exuberant consumption a year ago and a tenuous economic recovery, but the quarter also marked substantial growth from 1Q11, and total shipments topped over 17.8 million.
• Europe, Middle East, Africa (EMEA) – The EMEA PC market continued to contract in 2Q11, in line with IDC's forecast, as sustained high levels of inventory prevented stronger sell-in, particularly in Western Europe, where budget cannibalization from media tablets and smartphones continued to contribute to weak consumer demand and slow stock depletion. However, Central and Eastern Europe (CEE) and the Middle East and Africa (MEA) continued to expand and enjoyed positive growth overall.
• Japan – The impact of the earthquake on PC buying proved to be limited, thus the market produced stronger results than expected, with 3% growth. Many commercial projects commenced as earlier fears of inventory shortage did not materialize. Coupled with continued average selling price (ASP) declines since the beginning of 2011, consumer shipments also fared better than expected.
• Asia/Pacific (excluding Japan) – returned to double-digit growth of just over 12% as the market came in slightly above forecasts. A weak consumer market weighed down India, but other key markets like China continued their momentum to help offset this, despite the ongoing inflation challenges there.

Vendor Outlook -

• HP grew 3% compared to the second quarter of 2010. The vendor saw good growth in key emerging markets and also EMEA, but also had a slight drop in volume compared to the previous quarter.
• Dell saw growth of 2.8% worldwide. It managed to slow the pace of declines in key markets compared to the first quarter, with good gains in key emerging markets.
• Lenovo outpaced Acer Group to become the number 3 vendor worldwide. It continued to reap the results of its channel expansion in markets outside of Asia/Pacific, garnering notable gains in the U.S. and Japan. All regions saw positive growth and total volume increased by nearly 23% on the year.
• Acer shipments continued to decline from a year ago, but at a slower pace than in the first quarter as the company was affected by a review of inventory handling, as well uncertainties from its recent management shake-up.
• ASUS grew 6% to overtake Toshiba for the number 5 spot. While the vendor has had some difficulties adjusting for the decline in Mini Notebook PCs, it mainstream notebooks did well, especially in emerging markets.

Top 5 Vendors, Worldwide PC Shipments, Second Quarter 2011 (Preliminary)

(Units Shipments are in thousands)

Rank	Vendor	2Q11 Shipments	Market Share	2Q10 Shipments	Market Share	2Q11/2Q10 Growth
1	HP	15,263	18.1%	14,823	18.0%	3.0%
2	Dell	10,927	12.9%	10,626	12.9%	2.8%
3	Lenovo	10,276	12.2%	8,363	10.2%	22.9%
4	Acer Group	9,160	10.9%	10,190	12.4%	-10.1%
5	ASUS	4,468	5.3%	4,216	5.1%	6.0%
	Others	34,320	40.7%	34,070	41.4%	0.7%
	All Vendors	84,413	100.0%	82,289	100.0%	2.6%

Source: IDC Worldwide Quarterly PC Tracker, July 13, 2011
Table notes follow the last table

Top 5 Vendors, United States PC Shipments, Second Quarter 2011 (Preliminary)

(Units Shipments are in thousands)

Rank	Vendor	2Q11 Shipments	Market Share	2Q10 Shipments	Market Share	2Q11/2Q10 Growth
1	HP	4,692	26.3%	4,721	25.3%	-0.6%
2	Dell	3,959	22.2%	4,408	23.7%	-10.2%
3	Apple	1,917	10.7%	1,671	9.0%	14.7%
4	Toshiba	1,617	9.1%	1,560	8.4%	3.7%
5	Acer Group	1,513	8.5%	2,028	10.9%	-25.4%
	Others	4,159	23.3%	4,243	22.8%	-2.0%
	All Vendors	17,857	100.0%	18,632	100.0%	-4.2%

Source: IDC Worldwide Quarterly PC Tracker, July 13, 2011

Table Notes:

• Some 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, Portables, Mini Notebooks and do not include handhelds, x86 Servers and Media Tablets (i.e. iPad and Android-based Tablets). Data for all vendors are reported for calendar periods.

IDC's Worldwide Quarterly PC Tracker gathers PC market data in over 80 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.

For more information, or to subscribe to the research, please contact Kathy Nagamine at 650-350-6423 or [e-mail].

About IDC

IDC is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. IDC helps IT professionals, business executives, and the investment community to make fact-based decisions on technology purchases and business strategy. More than 1,000 IDC analysts provide global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries. For more than 47 years, IDC has provided strategic insights to help our clients achieve their key business objectives. IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. You can learn more about IDC by visiting www.idc.com.

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