Worldwide PC unit shipments in the fourth quarter of 2006 grew 7.4 percent compared to a year ago, with 67.3 million units shipped during the quarter, according to preliminary market data from Gartner. Gartner analysts said the overall PC market was impacted by stiff competition from the consumer electronics industry and the upcoming Vista launch. HP had a clear lead in terms of shipments during the quarter, and created a virtual tie with Dell for 2006 year-end results.

4th Quarter 2006 PC Market

In the fourth quarter of 2006, Hewlett-Packard’s worldwide PC shipments increased 23.9 percent, as its market share totaled 17.4 percent. Dell remained in the No. 2 position in the quarter, but its shipments decreased 8.7 percent, resulting in its market share total of 13.9 percent.

"PC price erosion was a defining feature of the quarter," said Mikako Kitagawa, principal analyst for Gartner Dataquest’s Client Computing Markets Group. "In the consumer market, the PC industry battled for wallet share against other consumer electronics products, such as games consoles and flat panel TVs, while at the same time cutting prices to ensure market demand did not stall prior to Microsoft’s Vista consumer launch in January."

Fourth quarter PC shipments in the U.S. decreased 3.2 percent. This was the second consecutive quarter that U.S. market showed a year on year decline.

Gartner analysts said the weakness in the U.S. market was attributed largely to weaker than expected shipments into the home market. In the fourth quarter of 2006, home desk-based PC shipments declined more than 20 percent from the fourth quarter of 2005 while mobile PC shipments increased more than 20 percent.

Dell maintained the No. 1 position in the U.S. PC market in the fourth quarter of 2006 (see Table 2), but its PC shipments declined 17.3 percent, equivalent to a market share of 29.1 percent. HP’s shipments increased 16 percent giving it a 25.3 percent unit market in the fourth quarter.

"Dell’s market share was its lowest in four years. It lost market share across all segments in the U.S., particularly the home market," Ms. Kitagawa said. "The fourth quarter’s consumer bias favors HP, however Dell’s accelerated shipment decline in the fourth quarter is surprising."

2006 Worldwide PC Market

Worldwide PC shipments totaled 239 million units in 2006, a 9.5 percent increase from 2005. The Europe, Middle East and Africa (EMEA) region continued to be the largest PC region during the year. Asia/Pacific and Latin America also well exceeded the worldwide industry growth average. U.S. PC shipments were well below the worldwide average to show the clear evidence of market saturation.

Dell and HP shared the No. 1 position in 2006, as both vendors had worldwide PC shipment market share totals of 15.9 percent. Toshiba moved into the worldwide top 5 table, surpassing Fujitsu/Fujitsu Siemens.

For 2006, U.S. PC shipments totaled 61.1 million units, a 1.2 percent increase from 2005.

PC shipments in EMEA totaled 80.3 million units in 2006, a 10.8 percent increase from 2005. The region ended the year with a strong fourth quarter, as shipments totaled 25.7 million units, an 11.9 percent increase from the fourth quarter of 2005. In the fourth quarter of 2006, the EMEA PC market suffered from weaker demand in Western Europe, in particular from Germany and the Nordic countries. The impending arrival of Vista seemed to have little effect on consumer demand, except to keep prices lower; consumers continued to purchase PCs at the entry level price points.

In Asia/Pacific, PC shipments reached 59.9 million units in 2006, a 17.2 percent increase from 2005. In the fourth quarter, PC shipments reached 15.7 million units, a 13.3 percent increase. In the fourth quarter demand was primarily soft as buyers were prepared to wait one more month for PCs installed with Vista. Consumers were also distracted by aggressive prices of LCD TVs.

The Latin America PC market had a strong year with shipment growth of 24.7 percent in 2006, with shipments totaling 18.6 million units. In the fourth quarter, shipments exceeded 5.4 million units, a 22 percent increase from the fourth quarter of 2005. The fourth quarter was dominated by the consumer market due to the holiday season, and the end-of-year “budget cleaning” by some enterprises and a few government offices.

In Japan, PC shipments totaled 14.2 million units in 2006, a 3.3 percent decline from 2005. The Japan market experienced a difficult fourth quarter, as shipments approached 3 million units, a 12.6 percent decline from the fourth quarter of 2005. Both the professional and private market showed negative year-over-year growth in the fourth quarter.

About the market reseaech report

Additional research can be found on Gartner's Computing Hardware section on Gartner's Web site. 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.

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