"Portable PCs continue to grow much faster than desktops, but recent results demonstrate the continuing competitiveness of desktop systems"
Loren Loverde, director of IDC's Worldwide Quarterly PC Tracker

Worldwide PC shipments are projected to grow by 13.5% in 2004, boosting market size to over 175 million units, according to IDC's Worldwide Quarterly PC Tracker. Rising unit growth and an incremental shift toward higher cost configurations are expected to lift shipment value to $194.5 billion during 2004 on growth of 9.2%. Higher growth expectations for 2004 have had relatively little impact on growth rates for 2005 and subsequent years with shipments expected to grow by nearly 11% in 2005 and roughly 8% from 2006 to 2008. Growth in shipment value is expected to hover in the 3-5% range during the remainder of the forecast.

"While there is little doubt that wireless capabilities, falling prices, and the growing need for mobility have increased demand for notebooks, many buyers remain price sensitive and continue to evaluate the benefits of mobile computing," said Loren Loverde, director of IDC's Worldwide Quarterly PC Tracker. "Portable PCs continue to grow much faster than desktops, but recent results demonstrate the continuing competitiveness of desktop systems."

Worldwide shipments of desktop PCs grew by 13.4% year on year in the first quarter of 2004, up from 9.6% in the fourth quarter of 2003, while portable PC growth slowed to 28.5% in the first quarter from more than 35% in the second half of 2003. The strong growth in desktops, which continue to represent more than 70% of worldwide PC shipments, helped boost growth expectations for total PC shipments in 2004 by 2.1% to 13.5%.

"Although the refresh cycle this time around is not as distinct as the one that preceded the Millennium, we are clearly going through a period of elevated demand that could be likened to a sea swell (as opposed to a wave breaking on shore)," added Roger Kay, vice president of Client Computing at IDC. "The rise is noticeable, but not overwhelming, and will last for a number of quarters. We can expect at least another year of this level of activity as companies update their aging systems and mainstream consumers increasingly adopt PCs for digital entertainment."

Regional Outlook:

-- United States - Improving business and persistent consumer demand should sustain shipment growth in double digits during the next two years. Although rising interest rates and consumer debt may limit overall growth, replacement demand and low-cost systems should continue to drive the market.

-- Western Europe - The rebound in commercial spending and long-awaited refresh cycles should boost shipment growth to nearly 15% in 2004. Continuing growth in portable PCs, particularly in the consumer segment, will remain a key market driver.

-- Japan - The Japanese market remains constrained by a tough economic environment and already high portable PC adoption. Overall growth projections for 2004 remain at just over 6%, up from less than 3% growth in 2003. Growth is expected to shift from the consumer to commercial segments during the rest of 2004.

-- Asia/Pacific - Growth in Asia Pacific should gain momentum as the local and global economies continue to strengthen. Growing exports and high investment in the PRC as well as other countries should boost growth in 2004 to more than 16%. Concerns over the Chinese government's WAPI encryption standard have largely faded, paving the way for continued rapid growth of portables in the region. -0-

U.S. and Worldwide PC Shipments and Growth, 2001-2005

(Shipments are in millions of units)

Source: IDC Worldwide Quarterly PC Tracker, June 2004

IDC's Worldwide Quarterly PC Tracker gathers PC market data in 55 countries by vendor, form factor, brand, processor brand and speed, sales channel and user segment. The research includes historical and forecast trend analysis as well as price band and installed base data.