Mini Notebooks and Telco Channel Drove Vibrant Consumer Sales in 3Q09, Partially Offsetting Overall PC Market Decline, Says IDC

LONDON, – October 19, 2009 – As expected, the PC market in Europe, the Middle East, and Africa continued to contract for the third consecutive quarter amid the global economic crisis, with overall PC shipments declining by 8% year on year in 3Q09, according to preliminary data released last week by IDC EMEA.

Western Europe continued to hold well, and consumer demand in the back-to-school season assisted the PC market to record positive growth again at 0.8%. Similar to the trends observed in the first half of 2009, the emerging markets of Central and Eastern Europe remained the most affected by the overall economic downturn, recording a 30.9% decline in PC sales. Following a brief rebound last quarter, the Middle East and Africa returned to negative trends, with PC volumes contracting by 5.1%.

Desktop shipments continued to suffer the most, directly impacted by sustained cannibalization from portables, and leading to another 22.3% drop in shipment levels. With portable PC sales displaying another quarter of positive growth at 1.4%, the share of portable PCs continued to rise in EMEA, representing 67% of total PC sales in the third quarter of the year.

Dynamics in the portable PC market continued to be driven by consumer demand, particularly in Western Europe, where consumers benefited from aggressive vendor push deployed across both the retail and telco channels, propelling consumer portables growth to 26.2%. However, as demand remained geared towards mini notebooks and low-priced entry-level systems, the industry continued to suffer from increasing pressure on margins.

"Buoyancy in the EMEA mini notebook market continued unabated, with an estimated four million units shipped in the back-to-school season," said Eszter Morvay, research manager, IDC EMEA Personal Computing. "The market has clearly benefited from further expansion of product availability, including new designs with 11.6-inch screens, as well as expansion in terms of available routes to market. As expected, the share of the telco channel continued to increase, with more dedicated investment and resources from top players, including Acer, Asus, and Samsung."

While the consumer market remained afloat thanks to mini notebooks, the commercial segment continued to suffer, as businesses remained cautious despite the first signs of economic improvement across a number of countries. There is increasing interest in new projects in some mature markets, driven by the need to replace the ageing installed base, lack of warranty, and the arrival of the new OS, but rollout is expected to remain subdued in the short term.

"Continuing its downward trend, the CEMA PC market reported year-on-year contractions of 21.2% in unit shipments. Both the Central and Eastern Europe and the Middle East and Africa regions are yet to recover from the economic crisis, with both continuing to suffer heavy market declines," said Stefania Lorenz, research director, Systems and Infrastructure Solutions, IDC CEMA. "In 3Q09, CEE posted 4.5 million PC shipments, which represents a year-on-year contraction of 30.9%, with neither notebook or desktop markets able to sustain any growth. Both product markets plunged by 27.3% and 35.5%, respectively. Despite contracting 5.1% year on year in overall volume, the MEA PC market was able to maintain growth in the notebook space, by reporting annual growth of 16.6% compared to the weak results posted by the desktop market at minus 25.4%, the MEA region shipped 3.7 million PCs in 3Q09. The outlook for CEMA remains gloomy for 4Q09."

Vendor Highlights

Acer deployed a major push in the back-to-school season and gained the number 1 position in the overall EMEA ranking, with PC shipments increasing by a robust 15.6% year on year. The vendor's performance was driven primarily by mini notebooks, benefiting from increasing traction in the telco channel. Aggressive offers on mainstream notebooks also assisted Acer to gain share across both the consumer and SMB segments. The vendor also continued to gain share in the desktop market, gaining second place in the EMEA desktop market ranking.

HP slid to second place in the overall ranking, but continued to drive share consolidation across both desktop and portable PC markets, outperforming the market in both categories, and continued to benefit from solid execution in the consumer and business segments. Thanks to a strong product portfolio and effective go-to-market, HP maintained solid positions in both the retail and business channels, while continuing to develop stronger partnerships in the telco channel.

Dell maintained third place in the overall ranking, despite further contraction of shipment levels. The unfavorable economic climate in the CEE region led to a further drop in PC sales, while results in Western Europe were lackluster, directly impacted by continued weakness in corporate/enterprise demand levels. However, the vendor's indirect strategy continued to assist Dell in further expanding its market share in the consumer portable PC market in Western Europe.

Asus regained fourth place in the overall EMEA ranking, despite reporting yet another quarter of double-digit decline. Performance in the CEE region remained the worst hit. However, results in Western Europe improved somewhat versus last quarter. Asus continued to leverage from the success of the Eee PC product line, but faced stiff competition across both retail and telco channels.

Toshiba continued to suffer from contracting volumes in CEE in particular, which adversely impacted the vendor's EMEA results. However, Toshiba experienced a rebound to positive growth in Western Europe, benefiting from increased momentum around the back-to-school period as well as several education projects across the region.

Top 5 Vendors: Europe, Middle East, and Africa (EMEA) PC Shipments*

3Q09 (Preliminary) (000 Units)

Vendor 3Q08 3Q09 Share 3Q08 Share 3Q09 3Q09/3Q08 Growth

Acer 4,947 5,717 18.50% 23.20% 15.60%

HP 5,208 5,046 19.40% 20.40% -3.10%

Dell 2,660 2,264 9.90% 9.20% -14.90%

Asus 2,061 1,787 7.70% 7.20% -13.30%

Toshiba 1,628 1,351 6.10% 5.50% -17.00%

Others 10,294 8,511 38.40% 34.50% -17.30%

Total Market 26,798 24,676 100.00% 100.00% -7.90%

Source: IDC EMEA Quarterly PC Tracker, Preliminary Results, 3Q09, October 16, 2009

*PC shipments = desktop and notebooks.

Shipments are branded shipments for all form factors (including desktops and notebooks) and exclude x86 servers as well as OEM sales for all vendors. Data for all vendors is reported for calendar periods.

For more information on IDC's EMEA Quarterly PC Tracker or other IDC personal computing research services, contact Associate Vice President Karine Paoli.

About IDC

IDC is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. IDC helps IT professionals, business executives, and the investment community make fact-based decisions on technology purchases and business strategy. More than 1000 IDC analysts provide global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries worldwide. For more than 44 years, IDC has provided strategic insights to help our clients achieve their key business objectives. IDC is a subsidiary of IDG, the world's leading technology media, research, and events company.

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