PC Shipments Up by 11%

Driven by price cuts, worldwide PC shipments totaled 54.9 million units in the second quarter of 2006, an 11 percent increase from the same period last year, according to preliminary results by Gartner, Inc.

Central processing unit (CPU) inventory clearance activity by Intel, and generally more aggressive pricing by Intel and AMD attributed to lower prices in the quarter. The impact of the CPU price decline varied among regions. In the US and Asia/Pacific, the cuts boosted shipments, while in Europe, Middle East and Africa (EMEA) where there remains higher than normal finished goods inventory, shipments were adversely impacted.

“On a worldwide basis, large vendors continued to gain share at the expense of mid-tier vendors and system builders,” said Charles Smulders, VP of Gartner’s Client Computing Group. “The price cuts during the quarter undoubtedly helped the large vendors, as they were able to put more pricing pressure on the smaller players. Intel’s accelerated ramp on its new CPU lines will expose those vendors who have not invested enough in tools and processes to manage their supply chain.”

In the second quarter of 2006, the Top 5 vendors accounted for nearly 50 percent of the worldwide PC market. These vendors all grew faster than the overall industry average. Dell maintained its No. 1 position in worldwide PC shipments, as it continued to grow much faster outside the United States.

Hewlett-Packard continued to show strength in the worldwide market, backed by solid consumer growth, mainly in mature markets. Lenovo, Acer and Toshiba rounded out the Top 5 vendors.

The EMEA region experienced single-digit growth for the first time in three years, as PC shipments in the region totaled 16.7 million units, a seven percent increase from the same period last year.

Will 2006 Be a Billion Unit Year?

After an impressive first quarter, worldwide mobile phone shipments fell just short of an all-time high in the second quarter of 2006 with volume of 237.8 million units. The robust quarter was enough to boast a 2.1 percent increase from the first quarter, and 22.5 percent more than the same quarter one year ago.

According to IDC’s Worldwide Mobile Phone Tracker, 470.7 million units have shipped so far in 2006, which suggests that the industry may be close to shipping one billion units for the full year.

“The industry has been eyeing the milestone of one billion handsets shipped in a single year for some time, and many believe 2006 will be the year it happens. However, while the first half of the year has been impressive, IDC does not see this milestone being surpassed this year,” said Ryan Reith, research analyst for IDC’s Mobile Phone Tracker. “Although the demand for handsets in emerging markets continues to soar, the market’s surging growth rate has been balanced by slowing demand in select mature markets.”

While the majority of handset shipments were made up of entry-level devices, the second quarter also witnessed strong growth in handsets capable of utilizing bulked-up, third generation network infrastructure. With EV-DO and UMTS now common in the many regions throughout the world, 3G networks and services are becoming an increasingly significant part of the mobility world. The presence of established high-speed networks has resulted in the introduction of new handsets capable of videoconferencing, Internet access at broadband speeds, and real-time content sharing, all of which drove increased demand during the second quarter.

Vendor Highlights

• Nokia: The second quarter proved to be another impressive quarter for Nokia as they posted 4.3 percent growth from the previous quarter and a 28.9 percent increase from one year ago, with an industry-leading 78.4 million units shipped. So far in 2006, Nokia has enjoyed the success of both the E-series and N-series device lines. Several product announcements during Q2 show that the E-series and N-series have the longevity to drive Nokia as an industry leader for some time. The worldwide leader in 3G handset shipments has leveraged these high-end lines to continue as the leader in the next-generation technology, while not losing site of the important role they play in supplying entry level devices in emerging markets.

• Motorola: The continued popularity of The RAZR produced another record quarter for Moto — the company’s fifth straight — with 51.9 million handsets shipped. This was a sequential increase of 12.5 percent over 1Q06 and 53.1 percent growth from one year ago. The big surprise came from iDEN shipments, as Motorola announced a record quarter of shipments driven by new product releases in the first half of the year.

• Samsung: The Korean based company took a 9.4 percent quarter-over-quarter decrease in 2Q06, with the majority of the loss coming from the Europe, Middle East and Africa region. With a number of 3G UMTS handsets launching across multiple regions in the second quarter, the time required for consumer adoption took a toll on device shipments. Despite the decrease in shipments from last quarter, Samsung did increase shipments into Asia/Pacific and the Americas, and worldwide shipments were up 8.2 percent from a year ago.

• Sony Ericsson: The second quarter of 2006 proved to be a strong one for Sony Ericsson as it posted 33.1 percent year-over-year growth, passing LG Electronics to become the No. 4 handset vendor worldwide. The company continued to build on the success of its Walkman-branded phones by launching a number of new devices, including the first UMTS Walkman phone (the W900), and announcing the W850, which will also be UMTS capable.

Gulf Women Making Their Mark

Batelco, one of two Bahraini telecoms, has been touting the number of talented women on its staff. The company announced that 95 percent of its work force are Bahraini nationals, of which 22 percent are women. Batelco’s female staff are employed in every department within the company, including an ever increasing number in technical positions.

Batelco encourages its entire staff to take the opportunity to advance in their careers and offers a wide range of internal training programs as well as sponsoring employees’ participation in external programs. The company has invested $132 million in staff training since 1981. From January to May this year, more than 700 staff members have undergone training and development at a cost of $1.4 million, to ensure Batelco’s work force is up-to-date with current and future needs. Staff have regular opportunities to apply for internal promotion and recently, out of eight management posts advertised, five were awarded to women.