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PC sales growth slows
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July 25, 2000: 3:47 a.m. ET
Reports signal maturing U.S. market; vendors buoyed by Asia, Latin America
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NEW YORK (CNNfn) - Growth in worldwide sales of personal computers slowed during the second quarter, with demand in the United States showing the sharpest decline, according to two separate industry reports released Monday.
Dataquest Inc. and International Data Corp. each released quarterly PC sales figures showing that sales growth in the United States substantially trailed growth in other regions.
By Dataquest's count, global PC year-over-year sales rose 18 percent worldwide, while sales in the United States grew 11.5 percent. According to IDC, worldwide sales were up 14.5 percent, compared with U.S. sales growth of 7.2 percent.
According to IDC's figures, the second-quarter's 14.5 percent increase in PC sales compares with a 28.7 percent year-over-year increase posted during last year's second quarter. Dataquest's 18 percent rise is down from a 26.9 percent increase reported last year.
Both firms said saturation in U.S. and European markets is largely to blame for the slide, a condition that poses a challenge to PC vendors moving ahead.
 "Vendors must find ways to persuade end-users to replace their PCs more frequently," said Charles Smulders, principal analyst for Dataquest's PC group. "Dataquest believes that the new generation of small form-factor PCs will be instrumental in making this happen."
Smulders added that the combination of smaller PCs and the deployment of Microsoft's Windows 2000 operating system should give a boost to PC shipments beginning in the fourth quarter of this year.
"Corporate America is still slow to adopt Windows 2000 and seems to be taking a wait-and-see approach to upgrading hardware," added IDC analyst Gabrielle Griffith.
Both firms showed that Dell Computer (DELL: Research, Estimates) strengthened its position as the leading PC vendor in the United States. Meanwhile, Dell's cross-state rival Compaq (CPQ: Research, Estimates) retained its position as the world's largest supplier of PCs, but lost ground in the United States.
"Dell enjoyed the pickup in corporate demand as it continued to march forward with its business-to-business e-commerce strategy," Griffith said. "The direct giant remained at No. 2 behind Compaq in worldwide market share but managed to close the gap."
Compaq's unit shipments declined 5.6 percent in the United States and grew only 6.1 percent worldwide. Meanwhile, Dell's U.S. shipments rose 26.6 percent, while worldwide shipments were up 22.3 percent.
Monday's news weighed heavily on the stocks of all of the major computer makers. The Goldman Sachs computer hardware index was down 18.57 at 593.27, a 3 percent decline.
Compaq shares were off 1 at 26-3/4. Dell slipped 3-15/32 to 48-29/32. Hewlett-Packard (HWP: Research, Estimates) shares tumbled 3-9/16 to 120-7/16. Gateway (GTW: Research, Estimates) was off 2-1/16 at 60-13/16. IBM (IBM: Research, Estimates) shares were trading 2-7/8 lower at 111-7/8. 
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Dataquest
IDC
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