Computer sales higher than expected

Computer shipments rose faster than expected in the second quarter, fuelled by exceptional demand and a decline in prices, two research groups said Wednesday.

Computer shipments rose faster than expected in the second quarter, fuelled by exceptional demand in emerging markets and a decline in prices in the United States and Western Europe, two research groups said Wednesday.

Worldwide shipments increased 16 per cent from a year ago to 71.9 million PCs, according to Stamford, Conn.-based Gartner Inc. The company had predicted 11.2 per cent growth.

IDC, a technology research group based in Framingham, Mass., that uses different methods to track sales, found a 15.3 per cent rise, to 70.6 million computers.

Gartner analyst Mika Kitagawa attributed some of the surge to ongoing trends such as rising shipments to emerging markets like China, Brazil, India and Russia and the increasing number of computers per home due to the popularity of laptops.

The power of the laptop segment was evident a day earlier, when chip-maker Intel Corp. said second-quarter profit jumped 25 per cent on ballooning global demand for the processors that serve as the brains of notebook computers.

However, Kitagawa hadn't foreseen the way economic jitters in mature markets would positively affect PC shipments in the quarter.

The analyst had forecast less than two per cent growth in the United States in the shadow of the mortgage and credit market turmoil. But those troubles pushed down the average selling prices of PCs, sparking a 4.2 per cent increase in U.S. shipments.

Loren Loverde, director of IDC's quarterly PC report, attributed less of the growth to sales spared by falling prices, though he acknowledged aggressive price competition in mature markets.

Both research groups found that Palo Alto, Calif.-based Hewlett-Packard Co. held on to the top spot in the global market, which it wrested from Dell Inc. in 2006.

But as in the first quarter, Dell's decision to expand sales of computers to retail stores helped it gain ground.

Gartner found Round Rock, Texas-based Dell's shipments grew 22 per cent while HP shipments rose 17 per cent.

HP's market share of shipments held steady at 18.1 per cent compared to a year ago, while Dell's share edged up to 15.6 per cent from 14.8 per cent, according to Gartner.

IDC reported similar dynamics between the two companies.

In the U.S., Dell topped HP, growing at a faster clip and grabbing 32 per cent of the market to HP's 25 per cent, according to IDC.

Taiwan-based Acer Inc., China's Lenovo Group Ltd. and Japan-based Toshiba Corp. rounded out both researchers' lists of the top five worldwide, each clocking in with less than 10 per cent share.

IDC's Loverde said Apple ranks No. 6 worldwide, but tied Acer in the United States for No. 3, with 7.8 per cent share.

In June, Gartner and IDC increased their outlooks for PC shipment growth in 2008, citing ongoing demand for laptops worldwide. But the second-quarter surprises won't automatically lead Gartner to boost its 2008 outlook again. Along with the trends that supported growth in the second quarter, Kitagawa will be weighing increasing demand for the nascent category of extremely low-cost laptops against the effect of rising oil prices on manufacturing and shipping.

Loverde, of IDC, was less optimistic.

"We're waiting for PC shipments to slow down," he said.

IDC forecasts 13.4 per cent growth in worldwide shipments in 2009 and 12 per cent in 2010.