PC Market Shows Signs of Life

PC vendors will ship 33.2 million units worldwide in the first quarter, up 4.8 percent from a year earlier, Dataquest, a unit of Gartner said Tuesday.

The market is expected to rebound later in the year as businesses start replacing PCs bought in the late 1990s as part of investments to fix Year 2000 problems, Dataquest said. Full-year shipments are expected to reach 138.7 million units, up 7.9 percent compared with 2002.

Dataquest is more optimistic than Merrill Lynch, which last week reduced its full-year 2003 PC shipment growth estimate to 137.6 million units, or 5 percent growth, down from its previous forecast of 7 percent growth.

Demand for PCs is still weak, and uncertainties about war and an economic recovery dampen consumer confidence as well as corporate PC purchases, Dataquest said.

Longer Lives

PCs bought in the late 1990s would normally have been replaced by now, but some users want to stretch PC lives to five years, Merrill Lynch said. Increasingly, instead of buying new PCs, users are upgrading old ones with new components, according to Dataquest.

Also, some companies have unused systems lying around because employees were laid off. These systems are being reused to a greater degree than in the past, Dataquest said.

The worldwide PC market showed double-digit shipment growth until 2000, when 134.5 million units were shipped. The number of shipments then dropped 4.2 percent in 2001 to 128.9 million units. Meager growth returned in 2002 with a 1.7 percent increase and total shipments of 131 million units, according to Merrill Lynch.