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World PC market grew less than 15% in 2000

Only Dell and HP beat industry averages

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The PC market grew by less than 15 per cent last year, hit hard by a dreadfully slow fourth quarter. Analysts at Gartner say the downturn indicates market saturation in some areas.

Worldwide, PC shipments reached 134.7 million units in 2000, up 14.5 per cent over 1999. The US market was slower, gaining only 10.3 per cent.

Over the last few years, the growth rate has steadily increased: 1998 saw growth of 15 per cent, 1999 of 21 per cent. So in 2000 the market growth has fallen below 1998 figures, indicating very clearly just how bad December and Q4 have been for the industry.

Of the big names, only Dell and HP managed to beat industry averages. Gartner said that Dell had done well by keeping prices down, while HP benefitted from its strong consumer franchise and from the support of the channel.

Charles Smulders, a principal analyst at Gartner, said that saturation in key market areas is becoming more important in market growth, and warned that new shipments are no longer able to mask the effects of economic cycles on replacement buying.

In his view, the timing of the downturn was "unfortunate", since it coincided with the, traditionally, strongest quarter for home sales. He noted that the commercial sector struggled as well: "Preliminary estimates also point to a weak professional market performance."

However, every cloud has a silver lining, and Smulders thinks that the sluggishness of the market, particularly in the final quarter of 2000, could be due to vendors shifting inventory that had built up earlier in the quarter. This will mean that the "overhang" should have less impact on the market in early 2001. ®

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