(HPQ) PC Computer Shipments to Grow in 2010

March 8th, 2010

As per the latest findings of leading technology research firm Gartner (IT), worldwide PC shipments are expected to grow 19.7%, reaching 366.1 million units in 2010. The firm also expects that spending on PCs will increase by 12.2% to a level of $245 billion.

We think this is good news for PC manufacturers like Hewlett-Packard Company (HPQ), Dell Inc. (DELL) and International Business Machines (IBM), who are already witnessing a sharp revival in demand from retail and industrial customers. This revised estimate is a sharp upward revision from the firm’s December forecast, which called for 13.3% growth in units on just 1.9% higher spending.

Hewlett-Packard delivered encouraging first quarter numbers, with revenue for the quarter coming in at $31.2 billion, an increase of 8.0% from the $28.8 billion reported in the year-ago period. The company also provided encouraging guidance for the second quarter and fiscal year 2010. The company also witnessed increase in revenue across its geographic segments.

Dell Inc. also delivered good fourth quarter 2010 results, with revenue for the quarter of $14.9 billion, up 11.0% from $13.4 billion reported in the year-ago quarter and up 16.0% from $12.9 billion reported in the previous quarter. The company witnessed revenue increase across all segments and geographies. Total sales from BRIC countries (Brazil, Russia, India and China) increased strongly, as revenue was up 72.0% to 81.0% in China, driven by increases in SMB and Large Enterprise businesses.

All these big players are putting special emphasis on the mobile computing business, which offers substantial growth opportunities. Gartner projects a 90% growth in mobile PCs over the next three years. Mobile PCs accounted for 55.0% of all shipments in 2009, and should hit nearly 70.0% in 2012, while tablet PC shipments are expected to be in the region of 10.5 million in 2010.

Overall, the PC market is poised for growth over the next few years, as Gartner believes that the PC market will remain robust with unit growth continuing to increase strongly, driven by higher demand for home PCs as well as professional replacements from companies exiting the global recession. This will in turn help PC makers increase their margins.

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