PC Gold Rush

desktop, laptop computer, pc, monitor CBS/AP

Worldwide PC shipments in 2003 showed double-digit growth for the first time since 2000 as consumers took advantage of falling prices and more people bought notebooks, according to preliminary numbers from two research companies.

Despite record shipments, top companies are not seeing higher revenue, said Roger Kay, a technology analyst at IDC.

"People are buying cheaper PCs so revenue is basically flat," he said.

But that doesn't mean no one is on the winning side of the PC sales stampede.

San Jose-based Intel Corporation, which makes chips that power desktop, notebook and server computers, saw its fourth quarter profits more than double.

For the three months ended Dec. 27, Intel earned $2.17 billion, or 33 cents a share, compared with $1.05 billion, or 16 cents a share, in the fourth quarter of 2002.

It was better news than either the company or Wall Street had expected. The firm - facing the traditionally slow month of January, and increasing competition from Advanced Micro Devices Inc.'s latest high-powered chip, the Athlon 64 - has issued a conservative estimate for how it expects to do in the current quarter.

As for PC manufacturers, the gold rush is real for consumers, even if current profit margins on sales are slim.

About 152.6 million units were shipped in 2003, an 11.4 percent increase over the previous year, according to Framingham, Mass.-based IDC.

Gartner Inc., which uses slightly different measurement methods, calculated that 168.9 million units were shipped in 2003, a 10.9 percent increase over 2002.

The companies released their figures on Wednesday.

Dell Inc., based in Round Rock, Texas, took over from Hewlett-Packard Co. as the top worldwide vendor during the year, shipping 25.8 million units, a 25 percent increase over the previous year, according to IDC.

Palo Alto, Calif.-based HP fell to second place with 25 million units shipped worldwide, a 14.5 percent increase over the previous year.

In the fourth quarter that ended on Dec. 31, however, HP took the No. 1 spot worldwide from Dell. HP's retail presence during the holiday season helped, Kay said.

"It's about momentum in the marketplace, and we think we got it," said Jim McDonnell, HP's vice president of sales and marketing.

Rounding out the top five in shipments worldwide for the year were International Business Machines Corp., Fujitsu Ltd. and Toshiba. Gartner, based in Stamford, Conn., listed the same top five.

Charles Smulders, a Gartner vice president, said the fourth quarter was a turning point for several large PC vendors.

IBM's "surprisingly strong" results indicated a recovering business sector, Kay said, adding that he expects worldwide PC shipments to increase as the economy improves.

In the United States, the top five vendors for the year were Dell, HP, IBM, Gateway Inc. and Apple Inc., according to both IDC and Gartner.

For the quarter, it was Dell, HP, IBM, eMachines Inc. and Gateway. EMachines was the biggest gainer with a 20.8 percent growth from the year-ago quarter while Gateway had a nearly 30 percent decline in growth, according to IDC, a 26 percent decline according to Gartner.

"Gateway has been imploding for a while and this is a continuation of a trend," Kay said.

IDC's numbers for IBM and Gateway are estimated because their earnings reports have not yet been released.

  • Francie Grace

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