updated 7/19/2005 8:50:41 AM ET 2005-07-19T12:50:41

Worldwide shipments of personal computers rose 16.6 percent in the second quarter as surging international demand and price wars drove shipments to their highest quarterly growth rate in nearly five years, IDC said Monday.

And in another sign of its dominance, market leader Dell Inc. distanced itself from No. 2 PC maker Hewlett-Packard Co. by posting 23.7 percent growth in the second quarter compared with 16.3 percent for HP, IDC said.

A report from another technology research firm, Gartner Inc., put overall growth at a more modest 14.8 percent for the April-June period. Stamford, Conn.-based Gartner uses slightly different measurement methods than IDC, of Framingham, Mass.

IDC said the 16.6 percent gain compared with the same quarter a year ago was the fastest growth rate since PC shipments posted an 18.9 percent year-over-year increase in the third quarter of 2000.

Growth spiked late in this year’s second quarter, with the growth rate coming in more than four percentage points above the 12.3 percent growth IDC had forecast in May. Gartner said the 14.8 percent growth it reported exceeded its previous projection by two percentage points.

“This kind of growth in the PC market is just amazing,” said Loren Loverde, director of IDC’s Worldwide Quarterly PC Tracker. “At some point, we expect the flood of consumer and portable demand to let up, but so far falling prices and demand across regions and market segments continues to support growth.

“Such consistent growth raises the prospect that the recent replacement wave is being supplanted by growing adoption that could sustain higher growth into the future.”

Difficult environment seen
However, Charles Smulders, a vice president at Gartner, said his firm expects “the operating environment to get yet more difficult in the second half of 2005 as PC replacement opportunities decline.”

Low-cost desktop computers and more affordable laptops helped drive second-quarter shipment growth, which was stronger in overseas markets than in the United States, IDC said. U.S. growth came in at 11.7 percent, compared with more than 20 percent growth in a market that encompasses Europe, the Middle East and Africa.

In international markets, “Competition is decreasing prices across all platforms to the point where we’re seeing record low prices on the desktop side and continuing decreasing prices on the laptop side,” said David Daoud, an IDC research manager.

Round Rock, Texas-based Dell’s market share rose to 19.3 percent, compared with Palo Alto, Calif.-based H-P’s 15.6 percent. Lenovo, which merged with IBM in the second quarter, is the No. 3 PC maker, with a 7.6 percent market share including the merger, followed by No. 4 Acer Inc. (4.4 percent) and No. 5 Fujitsu/Siemens (3.7 percent).

Taiwan-based Acer posted the strongest growth among top vendors, with 62 percent growth in the quarter.

Total PC shipments during the second quarter grew to 46.57 million compared with 39.94 million in same period a year earlier, IDC said. Gartner reported shipments of 48.9 million, up from 42.6 million a year ago.

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