PC shipments still strong in 2004 as Dell beats HP

The worldwide PC market finished 2004 on a strong note, with double-digit percentage growth for the year, according to research released Tuesday by IDC and Gartner Inc. But growth will slow in 2005 as consumers pull back from their frantic purchasing of the last few years, the companies said.

PC vendors shipped 177.5 million units during 2004, up 14.7 percent from the 154.7 million units shipped in 2003. This number represents the peak of a worldwide recovery from the decreasing shipments of 2001, IDC said.

Gartner's figures were slightly different, due to the different methods used by the two research companies to measure the sales of PCs from various vendors. PC shipments increased by 11.8 percent in 2004 for a total of 189 million units, according to Gartner.

IDC believes worldwide PC shipments will grow about 10 percent during 2005 and that growth will decrease the following year, it said. Business customers are in the middle of the replacement cycle that PC vendors have been anticipating for two years, but consumers have largely tapped themselves out after two years of keeping the PC market afloat amid slow business sales, IDC said.

That consumer weakness started to appear in the fourth quarter, said Charles Smulders, vice president of Gartner's Computing Platforms Worldwide Group, in a press release.

In the fourth quarter, Dell Inc. edged out Hewlett-Packard Co. (HP) in what is usually a strong quarter for HP. Dell shipped 8.8 million units during the quarter to HP's 8.2 million units. Dell also grew twice as fast as HP from the fourth quarter of 2003 to the same period in 2004, according to IDC.

Holiday purchases by consumers generally lift HP into the top spot worldwide during the fourth quarter. But the company did not show that strength in this quarter, increasing its shipments by only 9 percent compared to last year and losing market share to Dell, IDC said. Last week, HP appointed Vyomesh Joshi, the leader of its printer business, as head of a combined organization selling both printers and PCs.

IBM Corp. recently decided to get out of the PC business, selling its ThinkPad and ThinkCentre PCs to Lenovo Group Ltd. in December. That deal is expected to close in this year's second quarter. In the fourth quarter, IBM was the third-ranked vendor in worldwide shipments, with 2.9 million units, according to IDC.

The IBM-Lenovo deal appeared to have an immediate impact on IBM's shipments, with a dip in U.S. shipments noted as news of the deal spread, said Roger Kay, vice president of client computing with IDC. However, the company had largely recovered from that slight decline by the end of the year, he said.

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