Unexpected Climb in PC Shipments - TheStreet

Unexpected Climb in PC Shipments

Research firms IDC and Gartner say growth was twice expectations in the June quarter.
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In a welcome change for computer companies, the second quarter saw better-than-expected PC sales, with powerhouse

Dell

(DELL) - Get Report

enjoying the most growth of all.

Buoyed by strong sales of laptop computers and bargain prices, worldwide PC shipments jumped 10% from last year's levels, according to the research house Gartner. The firm said this marks the first time the industry has seen double-digit growth since the third quarter of 2000. Gartner's projections had been for a 6.4% year-over-year increase.

Second-quarter growth numbers from IDC, another research firm, were a little lower, at 8%, but still about double its projections for around 4% growth.

Dell is by far the biggest grower of the top five PC vendors, claiming a 29.5% gain in PC shipments from last year's levels. With 31.1% market share in the U.S., Dell is nearly as big as the top four other vendors, which have a combined share of 32.8%.

Still,

H-P

(HPQ) - Get Report

,

IBM

(IBM) - Get Report

and

Fujitsu

all posted growth of over 10%.

The robust shipment increases are clearly a sign that market conditions are improving, according to Gartner analyst Charles Smulders. But he added that his firm's survey data suggests U.S. corporate budgets remain tight. "Sustained improvement will depend on economic conditions and their effect on the business upgrade cycle," he said.

Said IDC's Loren Loverde, "It seems we dodged a bullet with SARS, and the market remains cautious, but growth in the U.S. and Europe is ahead of schedule and we're still expecting increased business spending and continued portable adoption."

"There's a chance the results are driven by aggressive short-term pricing, so I wouldn't throw caution to the wind," Loverde added, "but these are very good results."

Despite the encouraging hardware numbers, though, most tech stocks sank into the red in Thursday trading, pressured by poor reaction to IBM's financial results and a sales warning from

Nokia

(NOK) - Get Report

. In late-afternoon trading, IBM shares dipped $3.65, or 4.2%, to $83.09. H-P gave up 79 cents, or 3.5%, to $21.91, while Dell was off 80 cents, or 2.4%, to $33.20.