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PC sales to climb in 1Q
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March 9, 1999: 5:51 p.m. ET
Low priced personal computers keep sales strong in U.S., give Asia a lift
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NEW YORK (CNNfn) - Strong demand for personal computers is expected to fuel double digit growth rates for the industry this year, as falling prices help spur sales in the global markets, International Data Corp. reports.
The infotech research firm, based in Framingham, Mass., expects first quarter unit volume in the global PC market to jump 14.1 percent over last year, led by U.S. sales.
For the full year, IDC expects PC volume to climb 14.3 percent to 103.2 million units.
Bruce Stephen, IDC Group's vice president of worldwide PC research, said marketplace competition and the growing consumer appetite for low-priced PCs has computer makers scrambling to meet the needs of the dollar-conscious shopper.
The value of PC shipments this year will grow a modest 4.8 percent to $178.4 billion, according to IDC.
"This low-growth scenario illustrates the continued downward migration of consumer and commercial desktop, as well as portable PC, prices," Stephen said. "It also explains why PC vendors are moving at a frenetic pace to diversify their business models and revenue sources."
Regional outlooks
Consumer demand is projected to remain strong in the U.S. this quarter, as interest in inexpensive PCs stretches beyond the holiday sales season. Domestic sales, in fact, are expected to soar more than 19 percent this quarter and be the primary driver of worldwide growth.
Strong momentum in the portable PC market and domestic spending to prepare for Y2K (or the Year 2000) also are expected to contribute to strong first quarter and full-year results, IDC said.
At the same time, unit growth in western Europe is forecast to shift into lower gear this year after a wild ride in 1998. IDC expects unit growth in that region to rise about 15 percent this quarter.
In China, India and Australia, quarterly results are forecast to climb 14 percent, an easy year-over-year comparison from last year's weak showing. Falling PC prices and low penetration are projected to give China and India, in particular, a boost in consumer market growth.
Japan also is in the midst of a modest rebound, and is itself expected to produce quarterly unit growth of about 6 percent.
Finally, IDC said vendors pegged to consumer growth in the United States, Western Europe and Asia/Pacific (including Japan) will gain the most market share this quarter.
In the domestic market, Gateway 2000 (GTW), Compaq (CPQ), eMachines, and Apple (AAPL) will potentially post the strongest consumer growth numbers.
Companies like Legend (LPRO), the 15th largest in worldwide unit market share last year, may get a boost from the "impressive expansion" of the Asia/Pacific market, especially China, IDC said. 
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IDC
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