US GLOBAL PC DEMAND ON THE RISE
No June Swoon in PC Demand

ByChris Kraeuter, TheStreet.com Staff Reporter

The PC market grew more than expected during the second quarter, thanks to mobile demand, according to research firm Gartner.

Global PC shipments rose 14.8% to 48.9 million units from the same quarter last year, eclipsing Gartner's expectations by two percentage points.

The bullish news comes as corporations start reporting financial results for the second quarter. Last week, Advanced Micro Devices (AMD:NYSE), the No. 2 maker of microprocessors used in computers, cited strong mobile and server demand as drivers of its results.

In late May, Gartner boosted its forecast for PC growth to 10.2%, up from an earlier target of 9.9%. For the first half of the year, PC shipments are up 12.4% and the strongest part of the year is yet to come.

Gartner analysts, however, cautioned that this pace can't be kept up indefinitely. "We expect the operating environment to get yet more difficult in the second half of 2005 as PC replacement opportunities decline," said Gartner analyst Charles Smulders in a statement late Monday.

Winners during the quarter were Dell (DELL:Nasdaq), Apple (AAPL:Nasdaq) and Gateway (GTW:NYSE), according to Gartner.

Globally, Dell expanded its leading market share to 17.9%, up a percentage point from the first quarter and up 1.3 percentage points from the same quarter last year. Hewlett-Packard (HPQ:NYSE) also expanded its No. 2 market share on above-average growth.

In the U.S., Apple posted the highest growth rate among its peers as shipments grew 31%, helping it advance to No. 4 domestically from the No. 5 slot. Apple reported blowout financial results last week, but set cautious targets for the current period. Gateway held the No. 3 slot domestically on growth of 26.6%. Its market share rose to 5.7% from 5.3% in the first quarter.

July 18, 2005