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PC Market Weakness Eased by XP Migration

Stocks in this article: MSFTHPQ

NEW YORK (TheStreet) -- The PC market is hardly booming, although migration from Microsoft's (MSFT) Windows XP and healthy commercial spending delivered better-than-expected first-quarter performance, according to tech research firm IDC.

IDC reports that 73.4 million PCs were shipped in the first quarter of 2014, a year-over-year decline of 4.4%, better than the projected fall of 5.3%. IDC noted that commercial PC refreshes helped lifted PC shipments, which received a "last push" from the end of XP support, particularly in Japan. The Framingham, Mass.-based firm also highlighted slowing demand for tablets, which limited the effect of "previously drastic cutbacks" in netbooks.

Nonetheless, worldwide PC shipments have declined for eight consecutive quarters as a result of competition from tablets and smartphones and pressure in the wider economy, according to IDC. During the first quarter, PC sales felt the impact of weakness in emerging markets, particularly in Latin America and the Asia/Pacific region, excluding Japan.

"The economic front seems to be gradually stabilizing and/or improving," wrote Loren Loverde, vice president of IDC's Worldwide PC Trackers, in a statement. "However, this has been a slow process, and it is unlikely that sovereign debt issues will be resolved soon or that growth in emerging markets like China will return to prior levels."

Lenovo maintained the top position amongst PC vendors during the first quarter, with 17.7% market share, up from 15.3% in the same period last year. The Chinese tech giant also grew its shipments by 10.5% compared to the prior year's quarter.

HP (HPQ), which is in the throes of a massive corporate overhaul, also enjoyed healthy first-quarter performance to maintain second place in PC shipments. The Palo Alto, Calif.-based firm grew its market share to 17.1% from 15.6% year over year and its PC shipments by 4.7% over the same period.

Dell held third place, with 13.4% of the market, up from 11.7% in the prior year's quarter. The PC maker, which went private last year, grew its PC shipments by 9.3% compared to the first quarter of 2013.

Acer Group and Asus took fourth and fifth place with 6.8% and 5.9% of the market, respectively.

Gartner has also released its first-quarter PC shipment numbers, similarly noting market shrinkage, with PC makers selling 76.6 million units, a year-over-year decline of 1.7%.

Like IDC, Gartner cited the comparative strength of HP's PC business, highlighting the company's fastest shipment growth in two years, and EMEA growth that exceeded the regional average by a wide margin.

HP blew past Wall Street's estimates in its recent first-quarter results, with CEO Meg Whitman highlighting a "long overdue" PC refresh.

Shares of HP, which have gained 18.51% over the last three months, rose 2.5% to $33.54 in early Thursday trading.

--Written by James Rogers in New York.

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