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EMEA leads Q2 PC growth

The continued shift to notebooks and overall decline in PC prices has lifted the worldwide PC market in Q2 2005, IDC and Gartner said, with Europe, the Middle East, and Africa (EMEA) as the star region this quarter.

The continued shift to notebooks and overall decline in PC prices has lifted the worldwide PC market in Q2 2005, IDC and Gartner said, with Europe, the Middle East, and Africa (EMEA) as the star region this quarter.

IDC has recorded a 16.6% growth in Q2 PC shipment, while Gartner reported a 14.8% increase in PC shipments.

A total of 46.6 million units were shipped in the second quarter, up from 39.9 million units last year, said IDC. Gartner’s figures showed a total of 48.9 million PCs shipped during the quarter, up from 42.6 million units last year. The discrepancy in the numbers is due to the different approach the analyst firms record whitebox shipments.

The EMEA region recorded a total shipment of 15.4 million units, an 18.7% increase from the same period in 2005.

“The EMEA PC market saw a large increase in sales during June. This was driven by a double-digit fall in the average selling prices of mobile PCs,” said Ranjit Atwal, analyst for Gartner’s computing platform group in EMEA. “In addition, end of quarter promotional deals increased inventory levels rather than drove user demand. This is a strategy that is unsustainable in the medium term.”

Ongoing replacement cycles and competitive PC pricing schemes have helped increase PC purchases, said Charles Smulders, vice president of Gartner’s computing platforms worldwide group. He also said that aggressive pricing strategies would continue through to the second half of the year.

“Demand for mobile form factors accelerated sales during the second quarter,’ said Smulders. “Aggressive price cutting was also a significant factor in driving demand for desktop PCs.”

Dell extended its lead in the worldwide market, accounting for 17.9% of global PC shipments. Dell experienced much higher growth rates outside of the US, but it also grew ahead of the market rate in its domestic market, where the bulk of its shipments are made.

Hewlett-Packard’s PC shipments growth rate exceeded the worldwide average, as the company performed well in the EMEA and Asia/Pacific regions. The quarter was a transitional time for the company, as Mark Hurd was appointed the new CEO in April, and the Personal System Group (PSG) was split from the Imaging and Printing Group after one quarter. In June, Tom Bradley was appointed as the new head of PSG.

“While shipment picture was better than Gartner expected, it was another quarter of intense price competition for the PC vendors,” Smulders said. “Even so, we expect the operating environment to get yet more difficult in the second half of 2005 as PC replacement opportunities decline.”

PC shipments in the United States totaled 15.6 million units, a 10% increase from Q2 2004. The US consumer segment did well with robust mobile PC sales.

PC shipments in the Middle East and Africa (MEA) and Central and Eastern European (CEE) regions continue to grow strongly. Local vendors in the less saturated Western European PC markets like Spain and Italy also regained some market momentum, although others such as the Nordic regions continue to struggle.

For the first time in a year, HP PC shipments grew beyond the market average and recorded a 32.2% increase in Q2 2005. The introduction of a new mobile PC range completed its mobile PC portfolio. It allowed Hewlett Packard to effectively compete in the mobile PC market with a growth of over 50%, albeit of a low base in the second quarter of 2004.

Dell recorded the highest growth this quarter, with strong growth in Germany driven by high marketing exposure.

Lenovo saw shipments fall in large accounts due to uncertainties surrounding the transition of business from IBM. However, distributors report encouraging signs that Lenovo is already reacting quicker to market conditions than it was possible under the old IBM structure.

“Demand surged in the first half of 2005 driven by an aggressive pricing strategy from vendors. Vendors will struggle to maintain this excellent shipment growth during the rest of the year and retain profitability levels at the same time,” said Atwal.

In the Asia/Pacific region, shipments increased 17.3% in the second quarter. Mobile PC growth was very strong in the region, but China and India also attributed solid growth of desk-based PC shipments. In China, the market has been stimulated by the bundling of 17-inch LCD monitors.

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