Reports: Bad year for PC industry

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Posted 9:13AM on Friday, January 18, 2002

BOSTON - Even Christmas cheer couldn't brighten the spirits of the personal computer industry, which suffered through a disastrous 2001 that saw fewer PCs shipped than in 2000, two new reports say. Research firm Gartner Dataquest said Thursday that worldwide PC sales fell 4.6 percent in 2000, and fell 11.1 percent in the United States. Framingham-based IDC called it a 5.1 percent drop worldwide, and a 12.2 percent fall in the U.S. ``In reality, from several aspects, it's the worst year in the industry's history,'' Gartner Dataquest analyst Charles Smulders said. IDC analyst Roger Kay was slightly more upbeat, saying a 16.9 percent jump in shipments between the third and fourth quarters showed a light on the horizon. ``The outlook for 2002 still remains cautious,'' Kay said. ``But it was a jolly holiday. There were consumers in the U.S. out buying.'' But Gartner's Smulders said the bounce was artificial - little more than orders postponed from the third quarter after Sept. 11. Both reports showed Dell emerging strongly from 2001 by catering to the interests of consumers who are propping up the PC business as business spending slumps. Gartner said Round Rock, Texas-based Dell's shipments increased 18.3 percent to about 17 million worldwide, and its market share grew about 3 percent to 13.3 percent. ``The clear winner in the market in 2001 has been Dell,'' Smulders said. ``They led a price war beginning in the first quarter. Their superior supply chain efficiency has let them maintain margins while lowering prices.'' Dell was the only one of the five major PC makers whose shipments increased last year. IDC defines PCs differently, but it also showed a strong year for Dell, with a 27.5 market share - an all-time record for a single company since it began surveying the industry in 1981. But Kay said there was also relatively bright news for Hewlett-Packard, which appears to be offering consumers the best combination of what they want: a well-priced, strong performer with lots of entertainment goodies. ``H-P has been quick about getting that stuff into consumer boxes at a good prices,'' he said. ``We heard from retailers here and there that H-P was in demand, that the package they put in front of consumers was appealing for the price.'' According to Gartner's figures, Compaq was No. 2 in PC shipments with 5.5 million, followed by H-P at 4.4 million and Gateway at 3.2 million. Both research firms indicated the combined shipments of Hewlett-Packard and Compaq, who have proposed a merger, would still trail Dell. IBM, which has stopped making desktops in Europe and North America, was hardest hit, with a 22.1 percent decline in shipments year on year, and only 5 percent growth from the third quarter to the fourth. Kay said the company is the most dependent on business spending, and therefore benefitted least from the year-end consumer surge. Both analysts indicated a moderate turnaround is expected with an improvement in the overall economy in mid-2002.