Gartner Dataquest Says Worldwide PC Shipments in Second Quarter of 2002 Dampen First Quarter Optimism.

Business and Technology Editors

SAN JOSE, Calif.--(BUSINESS WIRE)--July 18, 2002

While hopes were raised in the first quarter that the PC industry was showing the first signs of recovery, the industry suffered a slight setback as worldwide PC shipments in the second quarter of 2002 declined 0.6 percent from the same period last year, according to preliminary results from Dataquest Inc., a unit of Gartner, Inc. (NYSE: IT and ITB).

Worldwide PC shipments totaled 29.9 million units in the second quarter of 2002 (see Table 1), while PC shipments in the United States reached 10.6 million units, a 8.5 percent decline from the previous year (see Table 2).

"The market undoubtedly saw the effects of inventory overhang from the first quarter, but at the same time we have yet to see any significant return to corporate buying, and in the consumer market buying appears to have fallen back further in some regions," said Charles Smulders, vice president of Gartner Dataquest's Computing Platforms Worldwide group. "Economic uncertainty continued to undermine business confidence, which has been further compounded in the United States by the Enron and WorldCom MCI accounting scandals."

The combination of Hewlett-Packard and Compaq moved it into first place in the worldwide rankings, but just 0.6 percentage points higher than Dell. While the new HP gained the No. 1 position in the quarter, it experienced a 16.1 percent decline in shipments.

Table 1

Preliminary Worldwide PC Vendor Unit Shipment Estimates for 2Q02
(Thousands of Units)

                2Q02       2Q02 Market  2Q01       2Q01 Market  Growth
Company         Shipments  Share (%)    Shipments  Share (%)    (%)
--------------- ---------  -----------  ---------  -----------  ------
Hewlett-Packard    4,627      15.5        5,517       18.3      -16.1
Dell               4,459      14.9        3,944       13.1       13.1
IBM                1,960       6.6        2,145        7.1       -8.6
NEC                1,045       3.5        1,147        3.8       -9.0
Toshiba              896       3.0          849        2.8        5.5
Sony                 830       2.8          672        2.2       23.7
Others            16,079      53.8       15,807       52.5        1.7
Total Market      29,895     100.0       30,081      100.0       -0.6
                  ------     -----       ------      -----      -----

    Note: Data includes desk-based PCs, mobile PCs and IA32 servers.
Hewlett-Packard and Compaq are reported as one company.

    Source: Gartner Dataquest (July 2002)

    "HP's decline is based on three factors: first, inventory
adjustments being made during the integration process; second, its
reliance on the weak performing U.S. retail segment; and third,
business disruption as a result of the merger process," Smulders said.
"We expect the third and fourth quarters to be a better measure of the
success of the merger strategy."
    Dell was the only top five vendor, both worldwide and in the
United States, to experience double-digit growth in the second
quarter. Gartner Dataquest analysts point out that Dell continued to
sharpen its efficiency, as it achieved 9.9 percent operating expenses
of revenue during its fiscal year 2002, which ended May 3. It was the
lowest operating expenses of revenue in Dell's history as well as any
other PC vendor.

Table 2
Preliminary U.S. PC Vendor Unit Shipment Estimates for 2Q02
(Thousands of Units)


                2Q02       2Q02 Market  2Q01       2Q01 Market  Growth
Company         Shipments  Share (%)    Shipments  Share (%)    (%)
--------------- ---------  -----------  ---------  -----------  ------
Dell               2,925      27.7        2,526       23.7       15.8
Hewlett-Packard    1,949      18.4        2,282       21.4      -14.6
IBM                  663       6.3          646        6.1        2.6
Gateway              651       6.1          798        7.5      -18.4
Apple                456       4.3          461        4.3       -1.2
Others             3,933      37.1        3,948       37.0        0.3
Total Market      10,576     100.0       10,660      100.0       -0.8
                  ------     -----       ------      -----      -----

    Note: Data includes desk-based PCs, mobile PCs and IA32 servers.
Hewlett-Packard and Compaq are reported as one company.

    Source: Gartner Dataquest (July 2002)

The EMEA region experienced a slight shipment decline of 0.3 percent in the quarter, while Japan dropped 12 percent. Asia/Pacific and Latin America showed single-digit growth rates of 5 percent and 4.3 percent, respectively.

Gartner Dataquest analysts said the excitement of the World Cup soccer tournament impacted some retail sales in Asia/Pacific, Japan and Latin America as some consumers focused on the games instead of buying PCs.

"Vendors should plan for worldwide unit shipment growth to be approximately 2 percent to 4 percent in 2002, down from our previous estimate of 5 percent growth. Vendors must capitalize on DVD drive and graphics chip technology to draw consumers to their products in the fourth quarter," Smulders said.

These results are preliminary. Final statistics will be available soon to clients of Gartner Dataquest's PC Quarterly Statistics Worldwide by Region program. This program offers a comprehensive and timely picture of the worldwide PC market, allowing product planning, distribution, marketing and sales organizations to keep abreast of key issues and their future implications around the globe. To subscribe to this program, please call 408-468-8000. Additional research can be found on Gartner's Hardware and Systems Focus Area on Gartner's Web site at www.gartner.com/1_researchanalysis/focus/hwmkt_fa.html.

Gartner Dataquest is the recognized leader in providing the high-technology and financial communities with market intelligence for the semiconductor, computer systems and peripherals, communications, document management, software, and services sectors of the global information technology industry.

Gartner, Inc. is a research and advisory firm that helps more than 10,500 clients understand technology and drive business growth. Gartner's businesses consist of Gartner Research, Gartner Consulting, Gartner Measurement and Gartner Events. Founded in 1979, Gartner is headquartered in Stamford, Connecticut, and has 4,000 associates, including 1,200 research analysts and consultants, in more than 90 locations worldwide. Fiscal 2001 revenue totaled $963 million. For more information, visit www.gartner.com.