PC Market grows 11 percent, Gateway third largest PC builder in the US

Framingham (MA) - Strong international demand for computers kept the PC industry on a healthy growth path, according to a report released today by IDC. After merging with eMachines, once struggling Gateway surpassed IBM and Toshiba and has become the third largest PC company in the US.

Thanks to the geographic regions of EMEA (Europe, Middle East, Africa) and Latin America, the worldwide PC industry was able to reach initial sales forecasts in the first quarter of this year. Market research firm IDC said total shipments rose 10.9 percent to 46.2 million devices compared to the first quarter of 2004. EMEA posted a 15 percent growth, driven by demand for portable PCs. Year-over-year sales increases in the US slipped to 6.5 percent.

"First quarter results demonstrate that demand remains healthy going into the new year," said Loren Loverde, director of IDC’s worldwide quarterly PC tracker. "Although the market is expected to slow later this year, demand for portables, system replacements, and growth in emerging geographies continue to drive expansion."

"Outside the United States, a weakening dollar helped create market momentum, as strong international currencies, particularly the Euro, made dollar-denominated purchases attractive," added Roger Kay, vice president of client computing at IDC. "Despite US shipment results beating forecast slightly, the second half remains clouded, as macroeconomic indicators continue to be mostly negative."

On a worldwide basis, Dell once again outpaced its competition, growing sales 13.6 percent to 8.7 million computers resulting in a market share of 18.9 percent (plus 0.4 percentage points). HP maintained its 15.4 percent market share with sales growth of 10.9 percent to 7.1 million devices sold. IBM came in third with 2.0 percent growth to 2.3 million computers and a drop in market share from 5.5 to 5.1 percent. According to IDC, notebook computers accounted for 48 percent of IBM’s sales.

Dell continued to grow its presence on the US market with a market share climbing from 33.4 to 34.0 percent. Growth was 8.4 percent to 5.0 million computers. HP lost ground from 18.7 to 18.2 percent share with a sales growth of 3.6 percent to 2.7 million devices. As a result of the merger with eMachines, Gateway now is the US third largest PC supplier with 830,000 units and a market share of 5.7 percent. Compared to the first quarter of 2004, this translates into a sales increase of 96.5 percent for the company. However, combined sales of eMachines and Gateway are down 23.1 percent from one year ago. According to IDC, the slowdown reflects continued challenges for Gateway following the acquisition of eMachines, despite significantly expanding its channel network.

The US top 5 manufacturer ranking is rounded out by IBM in fourth place (627,000 units sold, 4.3 percent market share) and Toshiba in fifth (509,000, 3.5 percent).