Target and Toys R Us posted overall sales declines during the holidays.
The worldwide PC market continued its recovery from 2001 with a surprise fourth-quarter showing from U.S. consumers, IDC reports. Consumers who upgrade their PCs are likely candidates for more sophisticated services, which affect retailers’ offerings.
The worldwide PC market continued its recovery from 2001 with a surprise fourth-quarter showing from U.S. consumers, according to the IDC Worldwide Quarterly PC Tracker. Total worldwide PC shipments grew by 4% to 38.4 million units in the fourth quarter of 2002. In the United States, consumer demand boosted growth to 6.6% despite a challenging year-on-year comparison, IDC reported. U.S. sequential growth of 5.7% was low compared to the historical average of 6.7%, but still beat forecasts of 3.5%, the report says.
While PC sales are no longer an indicator of growing online access, consumers who upgrade their PCs are likely candidates for more sophisticated services, such as broadband Internet connections, which directly affect the content that retailers can provide.
IDC says the strength of U.S. consumer demand helped propel Hewlett-Packard back to number 1 in worldwide shipments after trading places with Dell over the previous three quarters. Hewlett-Packard challenged Dell for the top spot in the second quarter after absorbing Compaq, but Dell recovered the No. 1 spot in the third quarter through aggressive pricing and consistent execution of its direct business model, IDC said. Dell also performed well in the fourth quarter, sustaining an aggressive growth premium over the market and expanding its consumer and international markets, IDC said.
“The fourth quarter results show that HP is executing well after the merger and can leverage its consumer and international business to boost volumes when these markets are sound,” said Loren Loverde, director of IDC’s Worldwide Quarterly PC Tracker. “The health of these segments going forward, as well as HP’s ability to recapture some of the volume lost before the merger, will play a significant roll in the company’s ability to defend this title. We expect the race for leadership in total PC shipments will be neck and neck for the next few quarters.”
“Despite the overhanging cloud of recession-related consumer confidence issues, people came out and bought PCs anyway this holiday,” said Roger Kay, director of Client Computing at IDC. “This was helped by vendors that bent over backwards to offer great deals in retail and through direct distribution, actions that boosted shipment levels. Although this activity hurt the top and bottom lines in some cases, well-packaged bundles attracted a fair amount of up-sell, which should offset the negative impact of price cutting to some degree.”
On an annual basis worldwide shipments were up 1.5%, following a decline of 4.2% in 2001, IDC said. Dell led the market with shipments of 20.7 million and growth of 20%, while HP (excluding Compaq before the Q2 merger) shipped 18.4 million. Analyzed together, HP and Compaq shipments were down 9.2% from 2001 but would have surpassed Dell shipments with 21.8 million units.