The Canadian PC market experienced its strongest quarter of the previous eight in the final quarter of 2004.
Total shipments, including desktops, notebooks and servers, reached an estimated 1,118,300 units, which indicated a sequential increase of 6% and an annually growth of 10 per cent.
Contributing to the rise in activity was a strong performance on behalf of the global tier two vendors, specifically Toshiba and Acer. Relying on strong partnerships with IT resellers and the retail channel, both vendors were able to capitalize on market opportunities.
The system integrator channel was also busy in Q4, and finished with 39% of total shipments. Intel and AMD both remain committed to the channel, bringing new technology and new tools to the integrator community to help bolster demand and supply.
Desktops continued to represent the bulk of PC shipments, accounting for 71 per cent of activity. Notebooks were 24 per cent and servers were 4 per cent. Tier One global vendors – Dell, IBM and HP – accounted for 44 per cent of total unit volume. Tier Two vendors, including Toshiba, Fujitsu and Acer, comprised 16 per cent of activity.
A shift occurred in the fourth quarter PC market. Globally recognized tier one vendors lost a collective 3 per cent of PC shipment share, while the Tier Two vendors, primarily led by Acer, Toshiba and Fujitsu, experienced a combined 30 per cent increase in shipment activity. On behalf of a popular vendor such as Toshiba, strong inventory contributed directly to the increase in volume. For comparatively smaller PC vendors such as Acer and Fujitsu, robust inventory levels contributed to success, but also aggressive pricing and strategic reseller partnerships.
Demand for white box PC product grew slightly, with a 4 per cent increase in annual activity, which was the same growth rate experienced by the overall PC market. Canadian assembled and branded systems have a distinct advantage over the “”out of the box”” solutions from the global vendors, and that is the custom-designed nature of the products. The ability for systems integrators to offer customers the best components, coupled with service-based solutions around the hardware, is critical to the success of the custom-build market.
If the trend of purchasers opting for Tier Two vendors and Canadian-assembler continues throughout 2005, the future bodes well for the reseller channel. The shift away from globally recognized Tier One vendors could indicate a shift in the importance of brand preference and recognition.
Often discussed in the industry is the notion of the “”commoditization”” of the PC market. A shift away from Tier One brand names would further cement this trend, and help bolster shipments for Canadian-designed and assembled PCs.
(Michelle Evans is a researcher with Evans Research Corp.)
