World Cup slows PC sales in Q2; Apple shines, IDC says

The soccer tournament led to a sharp drop in sales in Europe

PC sales growth slowed during the second quarter in comparison with the first three months of the year as the World Cup soccer tournament distracted Europeans, leading to a steep slow down in shipment growth on the continent, market research firm IDC said in a report.

Despite slower growth overall, some computer makers thrived, including Apple Computer Inc., the report said.

Global PC shipment growth softened to 9.7% year-on-year in the second quarter. That's down from a blistering 12.9% pace during the first quarter, said Framingham, Mass.-based IDC.

"While overall growth remained strong, there were some unexpected twists in regional performance. Inventory from the first quarter and distractions from the World Cup significantly cut into European growth," IDC said.

PC shipment growth in Europe rose just 7% in the April through June period, compared with a 14% increase during the first quarter and an IDC forecast calling for 12% growth.

The slower second-quarter figure should mean more PC bargains for users. Increased competition among PC makers and sluggish growth in some key markets such as Europe and the U.S., which grew just 6.7% compared with the second quarter of 2005, should ensure low prices.

"We can expect to see heightened competition in the second half of this year as companies vie for growth," IDC said, noting that U.S. PC makers have slashed prices over the past six months to increase shipment growth. The company also cited aggressive competition between microprocessor makers Intel Corp. and Advanced Micro Devices Inc., as well as the delayed release of Windows Vista as factors that will affect PC market growth going forward.

Processor competition has already hurt Intel. The company yesterday reported second-quarter sales that disappointed Wall Street, and it blamed price competition with AMD as part of the reason for the shortfall.

There were several bright spots for PC vendors during the quarter. Apple shipments grew by roughly 16%, thanks to strong portable PC sales at its retail stores. "The strong growth reflects a successful transition to Intel-based systems -- a critical transition for the company that sets the stage for future growth," IDC said.

Apple yesterday reported earnings for its fiscal third quarter that solidly beat Wall Street estimates as sales of iPods and Macintosh computers soared.

Taiwanese PC maker Acer Inc. also continued to gain PC market share on growth that outpaced all other top vendors, IDC said. Gateway Inc. shined as its growth topped 15% for the second quarter, whereas Dell Inc. remained the PC market leader and gained global market share despite facing tough competition.

By region, the Asia/Pacific region, excluding Japan, continued to grow at a faster clip than the rest of the world because of strong PC buying in China, IDC said. India and South Korea grew at a slower-than-expected pace during the quarter, moderating PC shipment growth to the region at just over 18% year on year.

Copyright © 2006 IDG Communications, Inc.

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