PC Shipments Increase Despite Slow U.S. Economy

Worldwide PC shipments increased more than 15 percent in the second quarter of 2008 despite the downturn in the U.S. economy, with Hewlett-Packard and Dell still dominating the market.

IDC and Gartner each released separate reports on second-quarter PC shipments July 16. The IDC survey found that PC shipments increased 15.3 percent over the second quarter of 2007 for a total of 70.6 million PCs. The Gartner report showed an increase of 16 percent compared with last year for a total of 71.9 million PCs.

In the United States, PC shipments only increased about 4 percent during the quarter.

Once again, HP was the world's No. 1 supplier of PCs with the company shipping more than 13 million desktops and notebooks during the quarter. In the United States, Dell finished ahead of HP with PC shipments topping more than 5 million during the quarter.

Apple also had a solid quarter in the United States. The company shipped about 1.3 million Macs during the quarter, an increase of more than 30 percent, according to the two research reports.

While the U.S. economy continues to slow, consumers and their desire for laptops helped boost the entire worldwide PC industry, said Mika Kitagawa, an analyst with Gartner. Although PC shipments have slowed in the United States, regions such as Latin America have helped drive PC shipments throughout the rest of the world. In its second-quarter financial report released July 15, Intel reported that overseas sales, especially notebook processors, helped boost its bottom line.

Consumers and their increasing taste for mobility helped push the ASP (average selling price) of notebooks down even further during the quarter. Normally, notebook prices decline 2 to 3 percent from quarter to quarter, but fierce competition for retail space may have helped drive prices down even further during the second quarter.

"It was a surprise that, despite the economic downturn, PC shipments were not bad at all and, actually, PC shipments were better than expected," Kitagawa said. "I think the reason behind it was a sharp decline in ASPs. So you have the system price going down and demand goes up. The ASP decline is really increasing volume both in the United States and in Western European markets."

While consumers helped drive notebook sales and drive down prices, Kitagawa said enterprises have slowed their purchases of new PCs and IT departments probably will not refresh corporate fleets until 2009. If an IT department does need to replace PCs, Kitagawa said businesses seemed to prefer desktops to notebooks since desktops remain less expensive than corporate laptops.

"The professional space is slow right now and the replacement cycle will take off next year," Kitagawa said. "It [the replacement cycle] should have been this year, but because of economic uncertainties many companies have postponed the replacement of their existing PCs."

While HP continues to dominate the worldwide market, Dell increased its shipments more than 20 percent year-over-year for a total of more than 11 million worldwide PC shipments. Acer placed third with more than 6.7 million PC shipments. Lenovo finished fourth with about 5.6 million shipments and Toshiba placed fifth with 3.1 million PC shipments.

In the United States, Dell was followed by HP with about 4.1 million shipments, an increase of only about 5.5 percent from the second quarter of 2007. Kitagawa believes that HP is facing increased competition for retail space against Dell, Acer and other vendors and that is why its shipments slowed during the second quarter.

After Dell and HP, Apple and Acer shipped about the same number of PCs—1.3 million—in the United States during the quarter. Toshiba was fifth with more than 880,000 PC shipments in the United States.