by Nancy Weil

From...

(IDG) -- Last year was "terrific" for the worldwide PC market and that bodes well for the next 12 months, according to market researcher Dataquest.

Total global shipments for PCs hit 92.9 million last year, with 36 million in the United States. Those robust U.S. unit shipments, along with a strong showing in Europe, pushed the global PC market along, although other regions did not fare as well, said William Schaub, Dataquest vice president for PC computing, who highlighted preliminary figures during a teleconference.

The United States is a good indicator of what will happen globally, so, although other regions had figures that were "not that great" last year, a turnaround is expected, Schaub said.

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"I believe this is probably a precursor for demand flows in the world," Schaub said of the 19 percent growth rate in unit shipments registered by the United States in 1998. For the fourth quarter of last year, PC unit shipments rose 23.5 percent in the United States compared to the year-ago quarter.

"Those are terrific numbers," Schaub said.

While consumers aren't likely to be impressed by market figures -- however much analysts and the media might like statistics -- the numbers that do look terrific to buyers are the ever-lower price tags on PCs.

"The industry has done a phenomenal job of bringing affordable PCs to households," Schaub said.

Dataquest analysts created controversy when they predicted two years ago that the PC market would stagnate if vendors didn't do something to push into the home market. Analysts further suggested that vendors needed to make PC prices more affordable or show home users why having a computer was relevant to them.

Besides the price cuts, Internet service providers have boosted the home PC market by helping to show users why it's relevant to be online, Schaub said. Apparently, the message has gotten out to females, because women are the primary online users in U.S. homes, while young girls now are just as likely as their male counterparts to be logging on, Schaub said.

In the United States, 37 percent of all households, or more than 100 million, are online.

"That means that the lure of the Internet has truly taken hold," Schaub said, noting that analysts believe the same will start happening in other regions. For example, evidence of vast Internet growth is being seen in Europe, he added.

A central question now, though, is whether "fully functioning PCs" will continue to be the primary device used because personal digital assistants and the like also are coming on strong, Schaub said. However, as long as PC price points stay where they are -- in the under-$1,000 range -- users are likely to opt for computers rather than appliances that provide online access.

As far as hardware vendors go, Compaq leads globally with nearly 13 million units shipped and annual growth of 20.7 percent from 1997 to 1998.

"That's really fabulous, considering what Compaq has gone through this year," Schaub said, mentioning the major acquisition of Digital Equipment. Compaq appears to have its business model on track, he said.

IBM is second worldwide with 8.2 percent of the market, but Dell is closing in quickly with a "spectacular" 65 percent growth rate last year for 7.9 percent of the global market, Schaub said. Hewlett-Packard and Packard Bell NEC round out the top-five list with 5.8 percent and 4.3 percent market share last year, respectively.

PB NEC actually had negative growth year-to-year, with a 4 percent decline, according to Dataquest. IBM had the lowest growth rate, worldwide and in the United States, among the other four vendors whose shipment figures were analyzed.

In the United States, Compaq, Dell, Gateway, IBM, and HP are the top five by market share, in that order.

Apple didn't make either top-five list, despite strong sales of the iMac PC.

"The next two quarters become critical [for Apple]," Schaub said, noting that the company needs to broaden its product line to strengthen its appeal.

"Right now, the success for Apple is pretty much a phenomenon that is affecting Apple and not the PC world as such," Schaub said.

Nancy Weil is U.S. correspondent for the IDG News Service in Boston.