PC Shipments Stay Strong Due to Asian Demand

Despite three years of slowing growth in sales, worldwide PC shipments grew by a strong 12.6 percent in the first quarter.

The result beat analyst predictions of 11.8 percent growth, according to a study by IDC of Framingham. The study includes shipments of desktop, notebook, ultraportable and x86 server PCs, but not handhelds.

The extra demand was generated by markets in Japan and Asia, offsetting weak markets in Western Europe and the United States.

Emerging markets were stronger because the mature markets suffer from a glut of inventory following delays by Microsoft in shipping the Windows Vista OS, said Loren Loverde, director of IDC’s Worldwide Quarterly PC Tracker.

The unexpected quarterly surge could push worldwide PC sales to grow by 10.8 percent in 2006 as a whole, beating previous estimates of 10.5 percent. That growth is driven by falling prices, adoption of portable PCs and aggressive competition between PC vendors and between component vendors, Loverde said.

The news is similar to a June 7 report by the Semiconductor Industry Association, which also cited unexpected demand in the first quarter. The group revised its forecast of worldwide semiconductor sales from 7.9 percent growth to 9.8 percent growth, driven by strong demand for PCs, digital cameras, digital televisions and MP3 music players.

Despite this short-term success, PC sales are growing much slower than in recent years, such as 15.1 percent growth in 2004 and 16 percent growth in 2005, IDC said.

The decreasing sales growth has surprised chip and PC vendors. Executives at Intel and Dell blamed the softening market when they missed earnings targets in the first quarter.

That slow growth will continue, reaching just 11.7 percent in 2007 and 10.6 percent in 2008, according to IDC’s forecast.

The forces driving growth include sales of portable PCs in mature markets, sales of desktop PCs in emerging markets and the introduction of dual-core processors worldwide.

In raw numbers, PC vendors shipped 179.2 million units in 2004 and 207.9 million units in 2005. They are predicted to ship 230.2 million PCs in 2006, 257.1 million in 2007 and 284.5 million in 2008. The market could reach 333.7 million units by 2010.

-Ben Ames, IDG News Service (Boston Bureau)

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