Portable adoption remains the primary driver in all regions, nearly matching a record quarterly growth in Q3, and in 2005. Increase of more than 50% in Asia Pacific, excluding Japan and rest of the world, helped boost these regions to more than 36% of portable volume, while the United States and Western Europe saw growth above 20% and continued to account for more than 50% of portable volume. The deteriorating economic environment can however put a damper on PC growth. Nevertheless, Q4 growth has been the fastest since mid 2005 and there should be continued portable adoption and PC acquisition by both commercial and consumer segments. Replacements in mature regions supported by rapid growth in new users in emerging regions will add to pervasive technology evolution and falling prices to sustain growth. Lower cost consumer notebooks continue to drive PC market growth in all regions around the world. Consumers are increasingly seeing notebooks as essential personal communication and information gathering tools, and this will continue to drive growth and higher PC penetration ratio for several years to come.

Much of the growth came from the notebook markets, and, in particular, the consumer notebook segment. Notebook purchases are driving consumers to go from one PC per household to one PC per person. Due to this manufacturers are reacting by focusing their attention on customization and personalization. The ability to see and touch these devices in the retail environment and pick out the one that matches a consumers style and need is a critical part of the buying process for consumers.

Microsofts release of Service Pack 1 for Windows Vista during the past quarter is expected to eventually raise the desire for businesses to deploy new PCs using Vista, but the impact in Q1 08 was little. Instead, the quarters growth continued to be driven by declining average selling prices (ASPs) and the general transition to mobile PCs among businesses and consumers.

While the overall market was strong, there were some regional challenges. The US market, in particular, struggled when compared to other regions. This dynamic is indicative of a major trend impacting the global PC market, wherein the US is becoming less of an influence and emerging markets are growing in importance. Specifically, the US share of the worldwide market fell more than two points to 23% as against the same period last year.

Following years of strong growth, Asia Pacific excluding Japan (ApeJ) surpassed the USA as the region with the largest PC market in total annual shipments at end-2007. At the same time, rest of the world (RoW), composed of Latin America, Central and Eastern Europe,

The Middle East and Africa, and Canada, is not far behind. RoW led other regions on a quarterly basis in Q4 2007, and is projected to move from #3 to #2 on an annual basis in 2008. The United States, holding the top rank before 2007, continues to grow at mid single-digit rates, but has seen growth well behind better than 20% increases in emerging regions. By 2012, APeJ and ROW will account for nearly 59% of global volume, up from just over 48% at the end of 2007. The latest forecast increases 2008s unit growth from 12.8% in IDCs March forecast. Key factors driving the continuing strength of portable shipments, even in the face of economic pressure, are a greater emphasis on replacing desktops with portables and the emergence of ultra low-cost notebook PCs, such as the Eee PC from ASUS, systems built on the Classmate PC platform by Intel, and the XO from the One Laptop Per Child initiative. These systems have previously been excluded due to the use of non-traditional PC designs, including the use of embedded or custom operating systems, reduced processing power and storage, and questions about actual production volumes versus declared targets.

Team DQ

Page(s)   1