PC shipments threatened by U.S. economy

FRANKFURT: Global shipments of personal computers may not rise as fast as expected this year if U.S. economic growth slows, discouraging firms and consumers from replacing old models, said market research group Gartner.

Gartner predicted worldwide PC shipments would rise by 12.6 percent this year, or 185 million units, according to its preliminary third-quarter forecast. That is less than the 13.4 percent growth it predicted in the second quarter.

"Recent U.S. economic data does increase the uncertainty over the PC market's performance in the second half," Gartner analyst Kiyomi Yamada said in a statement.

"However, we believe that the most likely outcome is for the market to register double-digit growth in 2004," he added.

Weak data on the state of the world's leading economy have compounded worries over soaring oil prices, which has led to fears that the pace of global economic growth will decelerate.

In the last few days, U.S. data have pointed to a slowdown in job creation, reduced consumer confidence and a U.S. trade deficit that widened to a record $55.8 billion in June on falling exports and rising imports.

Gartner said there was still strong pressure on PC users to replace aging computers, but that it now saw greater potential for them to put off doing so.

"So long as economic conditions remain supportive, we believe users will respond," Gartner's chief computer platforms client analyst, George Shiffler, said in the statement.

"But the recent run-up in oil prices and talk of a U.S. economic 'soft patch' increase the possibility that this replacement cycle could be undercut by external events," he added.

In the second quarter, Gartner said, global PC shipments climbed 13.3 percent to 42.8 million units, driven by companies replacing old PCs, strong demand in Europe and aggressive promotions.

Dell Inc. was the largest PC maker worldwide, with Hewlett-Packard Co. in second place and International Business Machines Corp. third.

The second half of the year is typically stronger for PC sales because it includes both the "back-to-school" and Christmas holiday seasons.