April 20, 2001, 12:00 AM

Direct marketer Dell takes lead in PC sales as market slumps, says IDC

The worldwide PC market grew only 2.8% in the first quarter year over year, with a market drop of 9.5% in the United States, says a new report from IDC.

The worldwide PC market grew only 2.8% in the first quarter of 2001 from the first quarter of 2000, with a market drop of 9.5% in the United States, according to preliminary IDC data. Worldwide shipments reached 31.6 million units amid the market slowdown.

"After a cold holiday season in 2000, the U.S. consumer market hardened into a deep freeze going into the first quarter, adding to normal seasonal effects," said Roger Kay, research manager covering PC hardware at IDC. "Those companies with greatest exposure to the U.S. consumer desktop business were most punished by the arctic market winds."

In this environment, Dell, with its heavier commercial mix and aggressive pricing strategies, pulled ahead of its rivals, IDC reported. IBM also did reasonably well, IDC said.

"The slowdown still appears focused on the U.S. market, although other regions are by no means in the clear," said Loren Loverde, director of IDC`s Worldwide Quarterly PC Tracker. "Businesses and consumers alike are holding back."

IDC also reported:
--Business spending sustained single-digit growth in Europe during the quarter, but has not revived the market to double-digit rates. Consumer spending also remained weak. Although business demand in Europe is building somewhat, this trend will not be enough to reinvigorate the market for another couple of quarters.
--The Asian markets have also slowed from the rapid growth they experienced during the past couple of years, with Japan slightly behind expectations and Asia Pacific (excluding Japan) slightly better.
--In addition, reasons to buy are few and far between, as almost 90% of systems sold in the last three years are Pentium II or better.


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