PC sales rise indicate IT industry recovery

15 January 2004 Worldwide PC sales grew by 10.9% to 168.9 million units in 2003, according to new figures from analyst group Gartner, suggesting that the worst of the spending downturn in the IT industry is over.


Strong business purchases and increased holiday sales in the fourth quarter — the latter assisted by lower prices — were the main reasons behind the surge. In addition, the weaker dollar and the relative strength of the euro helped to drive down prices in Europe.

Analysts expect the trend to continue and forecast a healthy first quarter growth in PC sales in 2004 as well.

According to Gartner, Dell just held on to its number one position with a global market share of 15%, ahead of Hewlett-Packard on 14.3%. IBM was way behind in third with a market share of just 5.1%, with Fujitsu and Fujitsu-Siemens in fourth with 3.8%.

As a result of rising PC sales, semiconductor giant Intel was also able to report strong fourth quarter and full year results. Fourth quarter revenues were up 22% to $8.74 billion, while revenues for the full year weighed in at $30.1 billion, up 13% compared to 2003.

“The year began with a question mark and ended with an exclamation point,” said chief financial officer Andy Bryant. “Fourth quarter results were a little better than we anticipated… supported by sales of microprocessors, especially in the server product line,” he added.

At the same time, Apple reported Macintosh shipments up 12% year-on-year for its fiscal first quarter for 2004, while sales of its iPod digital music player soared by 235%.

Overall, sales rose by more than one third to $2.01 billion, a four year high. “It was an outstanding quarter for Apple, with double-digit unit and revenue growth,” CEO Steve Jobs told the Financial Times. The company also posted net income of $63 million.

Such financial results, combined with strong market figures from analysts, suggest that the IT industry is emerging from its three-year slump in sales. However, particularly in the PC industry, all vendors with the exception of Dell are struggling to eke out a profit as a result of rock bottom prices and razor thin margins.

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Ben Rossi

Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...

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