Gartner Says Notebook Sales Drive Worldwide PC Shipments to 14 Percent Growth in Third Quarter of 2003.

Business Editors

STAMFORD, Conn.--(BUSINESS WIRE)--Oct. 15, 2003

Driven by strong consumer and notebook demand, worldwide PC shipments totaled 42.5 million units in the third quarter of 2003, a 14.1 percent increase from the same period last year, according to preliminary results from Gartner, Inc. (NYSE: IT and ITB). The worldwide PC industry began to show signs of an upturn in the second quarter of 2003, and it gained momentum in the third quarter. This was the second consecutive quarter of double-digit shipment growth.

"Falling system prices, performance improvements and wireless awareness continue to bring notebooks to the attention of buyers, particularly consumers," said Charles Smulders, vice president of Gartner's Computing Platforms Worldwide group.

"In the short term, the notebook may become a victim of its own success," Smulders said. "Falling prices of LCD screens have increased notebook demand as well as demand for flat panel monitors and the small but emerging growth of LCD TVs. Mobile hard drives have also seen supplies tighten. These shortages may lead to increasing notebook prices in the coming quarters, which could hurt demand."

Dell was the No. 1 vendor in the region, based on worldwide PC shipments, with a 15.3 percent market share (see Table 1). Hewlett-Packard showed signs of improvement compared with the second quarter of this year. In the second quarter of 2003, HP trailed Dell by 400,000 units, but in third quarter of 2003, HP was just under 62,000 units behind Dell.

Table 1
Preliminary Worldwide PC Vendor Unit Shipment Estimates for 3Q03
(Thousands of Units)
----------------------------------------------------------------------
                                       3Q03               3Q02
                                      Market             Market
                             3Q03     Share     3Q02     Share  Growth
Company                    Shipments   (%)    Shipments   (%)    (%)
----------------------------------------------------------------------
Dell Computer               6,507.0    15.3    5,070.1    13.6   28.3
Hewlett-Packard             6,445.1    15.1    5,047.9    13.5   27.7
IBM                         2,267.3     5.3    1,946.8     5.2   16.5
Fujitsu/Fujitsu Siemens     1,558.7     3.7    1,304.4     3.5   19.5
Toshiba                     1,322.7     3.1    1,143.1     3.1   15.7
Others                     24,446.6    57.5   22,783.8     61.    7.3
Total                      42,547.5   100.0   37,296.1   100.0   14.1
----------------------------------------------------------------------
Note: Data includes desk-based PCs, mobile PCs and IA32 servers. HP
and Compaq are reported as one company, as are Fujitsu and Fujitsu
Siemens.

Source: Gartner Dataquest (October 2003)

"HP's strongest performance was in the U.S. market, although its performance in the Europe, Middle East and Africa (EMEA) region and Asia/Pacific region were significantly above the market averages," Smulders said. "HP's performance in unit terms is impressive, and with the focus on consumer sales in the holiday season, it is likely to be a close race between Dell and HP in the fourth quarter."

Dell experienced healthy shipment results in each region. IBM performed well in Europe and Asia/Pacific, growing above the market rate, but found the U.S. professional market more challenging. Toshiba had a good shipment quarter, moving into fifth place in the worldwide rankings. However, its recent restructuring announcements show that it achieved this at the expense of profit margins.

The U.S. PC market experienced an increase of 19.1 percent (see Table 2), driven by consumer, education and notebook sales. The home market benefited from the strong back-to-school sales. Retailers experienced strong sales during the quarter. Dell experienced the strongest growth rate, with U.S. shipments increasing 24.9 percent. Gateway showed the sharpest decline among top-tier vendors with U.S. shipments dropping 28.6 percent.

Table 2
Preliminary U.S. PC Vendor Unit Shipment Estimates for 3Q03
(Thousands of Units)
----------------------------------------------------------------------
                                       3Q03               3Q02
                                      Market             Market
                             3Q03      Share    3Q02     Share  Growth
Company                    Shipments   (%)    Shipments   (%)     (%)
----------------------------------------------------------------------
Dell Computer               4,287.7    27.4    3,432.9    26.1   24.9
Hewlett-Packard             3,041.8    19.4    2,272.5    17.3   33.9
IBM                           714.6     4.6      651.3     5.0    9.7
Gateway                       520.7     3.3      729.1     5.5  -28.6
Apple Computer                470.2     3.1      465.7     3.5    4.9
Toshiba                       470.0     3.0      404.4     3.1   16.2
Others                      6,151.6    39.3    5,193.9    39.5   18.4
Total                      15,656.5   100.0   13,149.8   100.0   19.1
----------------------------------------------------------------------

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

Source: Gartner Dataquest (October 2003)

On a global basis, all regions showed double-digit growth in the third quarter of 2003, with the exception of Latin America. In EMEA, demand continued to strengthen as a result of favorable exchange rates and vendor discounts. Asia/Pacific showed consistent growth, while Japan seems to be recovering from a long recession. While Latin America did not experience double-digit growth, the region is showing signs of improvement with stronger notebook sales, as well as improved economic conditions in Brazil.

These results are preliminary. Final statistics will be available soon to clients of Gartner'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.

About Gartner

Gartner, Inc. is a research and advisory firm that helps more than 10,000 clients leverage technology to achieve business success. Gartner's businesses are Research, Consulting, Measurement, Events and Executive Programs. Founded in 1979, Gartner is headquartered in Stamford, Conn., and has more than 3,800 associates, including approximately 1,000 research analysts and consultants, in more than 75 locations worldwide. Revenue for calendar year 2002 totaled $888 million. For more information, visit www.gartner.com.