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Computer industry

Ever-Cheaper PCs Drive Impressive Market Expansion in Q2 1999

Strategic Insights

— 2 min read

The release of IDC's preliminary estimates for Q2 1999 reveals a robust global PC market, driven by the "Nearly Free PC" movement and strong consumer demand. The market expansion is particularly notable, with a 27% year-over-year growth in worldwide PC unit sales. The United States led the charge, expanding by 35.3% to 10.8 million units, making it the strongest market in Q2 1999. Worldwide shipments reached 25.6 million units, a 2.5% decline from the previous quarter.

Key Takeaways:

  • The "Nearly Free PC" movement, coupled with subsidized or "nearly free" PC models, rebates, and ISP bundling, catalyzed market expansion.
  • The United States led the global market, expanding by 35.3% to 10.8 million units in Q2 1999.
  • Worldwide PC shipments reached 25.6 million units, a 27% year-over-year growth, driven by strong consumer demand.
  • The Asia/Pacific region continues to gain momentum due to the introduction of the "Nearly Free PC" model and increased interest in the Internet.
  • Higher consumer demand is driving sales in the Japanese marketplace, with the highest year-on-year Q2 1999 growth of any region worldwide.
  • Despite weakness in consumer demand, commercial PC sales in Western Europe remained strong and offset this decline.
  • Russia and Brazil continue to slowly recover, while the Canadian and Middle East markets showed positive growth, offsetting these regions' weakness.
  • Major vendors like Compaq, Dell, IBM, and HP reported strong unit gains, driven by luring consumers and building programs to create revenue "outside the box."
  • Compaq, despite executive turmoil, delivered strong quarterly performance, with its Presario desktop and mobile lines primary drivers.
  • Dell and Compaq were at a close tie for market share in the United States, with Dell's consumer business and commercial lines driving growth.
  • IBM rose to the number-three share spot, fueled by the performance of its mobile products and commercial desktops in the United States and international markets.
  • Hewlett-Packard emerged as a powerful retail force in the low-cost U.S. PC market, with its high-end PC and personal workstation lines also showing strength.

Statistics:

  • 25.6 million worldwide PC units shipped in Q2 1999, a 2.5% decline from the previous quarter.
  • 27% year-over-year growth in worldwide PC unit sales.
  • 10.8 million PC units sold in the United States, a 35.3% year-over-year growth.
  • The "Nearly Free PC" movement and subsidized PC models, rebates, and ISP bundling contributed to the market expansion.
  • 14.6% market share held by Compaq worldwide.
  • 55% year-over-year growth in Dell's unit volume in the United States.
  • 70% year-over-year growth in IBM's unit volume in the United States.
  • 14.6% of the worldwide market share held by Compaq.

Sources:

  • "IDC Releases Preliminary PC Shipments for 2Q99"
  • "Table 1: Top 5 Vendors, U.S. PC Shipments, Second Quarter 1999 (Preliminary)"
  • "Table 2: Top 5 Vendors, Worldwide PC Shipments, Second Quarter 1999 (Preliminary)"
  • International Data Corp., Q3 1999
  • About IDC section

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