PC Market Grew in '07, Faces Challenge in '08

Acer and Dell increased their retail presence and won, but a slowing U.S. economy could change the vision of the next 12 months.

The worldwide PC market for 2007 ended on an up note, according to separate reports from IDC and Gartner that found PC shipments for the year increased more than 13 percent compared with 2006. However, 2008 could be a different story.

The Jan. 16 reports from IDC and Gartner also show that both Acer and Dell benefited the most in the fourth quarter of 2007 by expanding their retail reach. While both of those companies improved their standing, Hewlett-Packard remained the world's top vendor after shipping about 50 million PCs in 2007.

The IDC report found that worldwide PC shipments reached 269 million in 2007, an increase of 14 percent compared with 2006. In the fourth quarter, PC shipments increased 15 percent compared with same period in 2006. The Gartner report came to a similar conclusion, finding that PC shipments hit 271 million units in 2007-a 13 percent increase-while fourth-quarter shipments also increased 13 percent.

PC shipments within the U.S. market increased nearly 9 percent, which was better than expected, said David Daoud, an analyst with IDC. However, concerns about the U.S. economy and a weak dollar could mean that PC shipments, especially in the United States, could slow in the next 12 months.

Click here to read about how Intel and Advanced Micro Devices are profiting from the current PC market.

"Overall, the market had double-digit growth, but regionally it was very different," Daoud said. "The mature markets, which have a great deal of saturation, only had single-digit growth. Of course, the wild card going forward in 2008 is the U.S. economy."

In 2007, the market was helped along by the spending of both consumers and small and midsize businesses, Daoud said. Larger businesses and enterprises held back on their spending, and Daoud said he believes that most large businesses will again resist buying new desktops and laptops in 2008.

The past year helped bring Dell back after more than a year of struggling and watching its dominance of the PC market being lost to HP and other smaller players. Daoud said Dell and Acer, which bought Gateway in August, benefited from expanding their reach into retail stores, which gave consumers more choices.

For 2007, IDC found that Dell's worldwide shipments increased about 2.3 percent and while its U.S. shipments fell 4 percent for the year, it remained the No. 1 PC vendor and shipped more than 19 million units. Gartner estimated that Dell's worldwide shipments increased about 1.7 percent in 2007.

HP's worldwide shipments for 2007 increased by 30 percent, Acer's increased 56 percent, Lenovo's increased nearly 22 percent and Toshiba's increased about 18 percent, according to IDC. In the U.S. market, Apple's shipments increased 31 percent, which ranked it third among the top five vendors, while Acer increased its shipments a staggering 171 percent.

Gartner also found that Acer, Lenovo and Toshiba each increased their PC shipments in 2007, although Gartner's numbers were more conservative than IDC's.

In the fourth quarter of 2007, Gartner found that HP's worldwide PC shipments increased 23 percent, making HP the largest vendor in the world. The report also found that Acer's shipments increased 23 percent, Lenovo's 22 percent and Toshiba's 16 percent.

According to Gartner, in the U.S. market, Acer shipped more than 1.5 million PCs in the fourth quarter, an increase of nearly 11 percent. Apple shipped more than 1 million of its PCs, an increase of 28 percent. Toshiba also increased its shipments by about 6 percent in the quarter.