Gartner Dataquest Says PC Industry Shipped Its One Billionth Unit in 2002

Two Billionth PC Will Be Shipped in 2008

SAN JOSE, Calif., July 1, 2002 - The personal computer industry has surpassed a historical milestone, as the one billionth PC was shipped this year, according to Dataquest Inc., a unit of Gartner, Inc. (NYSE: IT and ITB). Gartner Dataquest research shows the one billionth PC shipped in April of 2002.

While it has taken the PC industry approximately 25 years to reach the billion mark, the industry is forecast to ship the two billionth PC in 2008. The PC industry transformed businesses across the world on the way to one billion shipments, and the computer will continue to alter economies on its way to two billion units.

"The PC is a tool that allows humans to leverage intellectual ability," said Martin Reynolds, vice president and research fellow for Gartner. "The PC allows companies to complete basic tasks with fewer employees, freeing up resources that can be used to grow the business. Businesses can decrease process cycle times, reducing the amount of working capital consumed by administrative processes."

While broadband adoption rates have been slow into households, Gartner Dataquest analysts said it will continue to increase. The PC industry will receive a boost when there is true broadband (at data rates in excess of 10 Mbps to many connected households).

"In this sort of broadband environment, the PC will become the central appliance that manages all household communications and entertainment. Its technology will proliferate throughout the home, embodied in a range of low-cost devices that form an extended network," Reynolds said.

While the PC industry will move rapidly to the two billion shipment total in approximately six years, the industry will continue to experience consolidation.

"The PC industry has evolved into an intensely competitive environment. Companies that struggle today would be ferocious and unstoppable competitors in other businesses," said Reynolds. "The challenge that pressures the PC industry comes from Dell, which is able to support a massive and growing business on less than 11 percent of SG+A. The landscape will change with the HP/Compaq merger, which creates an enormous single supplier that, with Dell, will reshape the industry."

For the PC industry to hit the second billionth unit in line with Gartner Dataquest's forecast, the price of systems must continue to drop.

"With the wealthy heart of the PC market consumed, PC manufacturers face the challenge of lowering costs to address opportunities in emerging markets, such as China, Latin America and Eastern Europe," Reynolds said. "Lowering costs will be the greatest challenge for the industry in the next six years.

Additional information is available in the Gartner Dataquest report "The Billionth PC Ships." This report looks at some of the key historical events in the PC industry, and it examines what will drive the industry to ship two billion PCs.

This information is produced by Gartner Dataquest's Computing Platforms Worldwide research group. This research is designed to help companies focus on real opportunity, with coverage of the complete range of computer hardware platforms as well as associated supply chain of components, systems, distribution channels and end-user groups.

To subscribe to this program, please call 800-419-DATA, or 408-468-8000. Additional research can be found on Gartner's Hardware and Systems Focus Area on Gartner's Web site at

Gartner Dataquest is the recognized leader in providing the high-technology and financial communities with market intelligence for the semiconductor, computer systems and peripherals, communications, document management, software, and services sectors of the global information technology industry.

Gartner, Inc. is a research and advisory firm that helps more than 11,000 clients understand technology and drive business growth. Gartner's divisions consist of Gartner Research, Gartner Consulting, Gartner Measurement and Gartner Events. Founded in 1979, Gartner, Inc. is headquartered in Stamford, Connecticut and consists of 4,300 associates, including 1,200 research analysts and consultants, in more than 90 locations worldwide. The company achieved fiscal 2001 revenue of $952 million. For more information, visit