PC shipments fail to meet analyst expectations

Most PC vendors can expect a lump of coal in their stocking this Christmas, according to IDC Canada.

According to the Toronto-based research company’s third quarter (Q3) PC shipment estimates, the market shrank by 7.5 per cent

over Q3 2001 (703,900 units down from 760.900). And while PC shipments were up over Q2 2001 by 2.3 per cent, research analyst Eddie Chan says this is no reason to get excited. The second quarter is traditionally the weakest of the year, he says, and a such a small increase is not confidence-building.

“”We were anticipating a kick of 16 per cent,”” he says “”It was pretty ugly.””

Hardware and software companies should brace themselves for more of the same. Chan says many believed companies would be refreshing the PCs they bought in reparation for Y2K about now. IDC has pushed back its prediction to the second half of 2003.

“”Everyone’s on the good-enough-computing bandwagon right now. We don’t see moderate growth on the commercial side until 2003 Q3 timeframe,”” says Chan, and adds PC shipments for the year should be down about 4.1 per cent over 2001. “”Hardware is so much father ahead of software. It’s going to be a while before software can utilize that horsepower.””

One vendor, however, has continued grow. While the Q3 2002 market shrank by 7.5 per cent over 2001, Dell Computer Corp. managed grow by 16 per cent. IBM and HP faired the worst over the same period: IBM went from 123,1257 units to 101,700 and HP fell from a market-leading 170,305 to 126,400. Chan pins HP’s -25.8 per cent slide on issues related to its merger with Compaq Corp.

“”Everybody’s mindset is engaged in the core business. I think until they get that resolved there may be some rocky times still ahead,”” Chan predicts.

Joe Aucoin from Toronto-based Commerx, an HP-exclusive reseller, says HP and Compaq have done a “”masterful”” job with the merger, but missing some opportunities was inevitable.

“”I expect them to turn it around,”” Aucoin says. “”The product lineup is not just as good as it was, it’s better.””

If HP manages does reclaim top PC vendor status in Canada, it will do so in a much different climate from years past. Chan says the days of double digit PC market growth are over and Dell is picking up steam.

“” They’re executing — plain and simple. Going forward in Q4 I don’t see any divergence from that path,”” Chan says.

HP’s worldwide PC market share is 16.6 per cent, exceeding Dell by two percentage points. HP Canada executives said the company is in a quiet period and according to SEC regulations could not comment on its PC business.

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