Computers seen selling briskly in holiday buying

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SAN FRANCISCO, Oct 31 (Reuters) Personal computers are likely to be among this holiday season's best-selling gifts as consumers upgrade to higher-performance systems and switch to notebook PCs, but the highest demand is coming from outside the United States.

Sales are being driven by falling component prices, entertainment applications such as games, videos and music, growing demand for portable machines and consumer adoption of Microsoft Corp's Windows Vista operating system.

Those trends are stoking sales of computers from Hewlett-Packard Co, Dell Inc, Apple Inc and Acer Inc, among others, according to researchers. A weaker dollar is helping drive sales in Europe.

''A lot of laptops go with the gifts under the trees,'' said Gregory Spierkel, chief executive of Ingram Micro Inc, the world's largest distributor of PCs and computer products, in a recent interview.

''We're seeing pretty good progress with notebooks across the board,'' Spierkel said. ''I see that trend continuing for the current quarter.'' Computers topped holiday wish lists in a recent survey by the Consumer Electronics Association, beating out peace and happiness, big-screen TVs, clothes and money, in that order.

Some of the biggest buyers are consumers in emerging markets whose rising incomes are allowing them to make big-ticket purchases for the first time, according to market researcher IDC, which is forecasting 12.6 per cent growth in global PC shipments this year, up from 9.7 per cent in 2006.

In the United States, PC shipments grew at about one-third the rate of the worldwide total of 15.5 per cent in the third quarter, reflecting the importance of emerging markets in boosting computer sales, IDC said. US consumer confidence remains strong despite protracted housing and credit turmoil, analysts said.

The PC is enjoying a resurgence following several years in which digital music players, mobile phones and automotive gadgets such as global positioning systems topped consumers' holiday wish lists, analysts said.

No longer just a staid workhorse for handling word-processing, email and other basic computing tasks, the PC these days is becoming an entertainment hub in and out of the home, thanks largely to faster Internet connections that bring high-quality video to computer monitors.

''The computer market has legs,'' said Roger Kay, president of market researcher Endpoint Technologies Associates Associates Inc.

''That's surprised a lot of us (who wondered), 'Haven't people gotten tired of this yet?' The answer is, 'They haven't.''' ''You still need screen real-estate to do certain things, particularly to enjoy entertainment,'' Kay said. ''The digital entertainment era is coming into its own. Ultimately, both audio and video entertainment are most conveniently enjoyed these days on some kind of computer platform.'' HP of Palo Alto, California, remained the market-share leader by unit sales, followed by Round Rock, Texas-based Dell, China's Lenovo Group Ltd, Taiwan's Acer and Japan's Toshiba Corp.

In the United States, Dell held the top market share spot in the third quarter, followed by HP and Apple, which shipped 15.9 per cent more Macintosh computers than in the year-earlier period, IDC said.

Apple benefited from strong back-to-school sales and its image as an innovator after it introduced the iPod music player and the iPhone, which went on sale in June.

Apple, based in Cupertino, California, was among the first computer makers to promote the concept of the home computer as a digital hub linking PCs, music players and other hardware with software and online services such as Apple's iTunes music store.

''We're definitely optimistic'' for holiday PC sales, said IDC analyst Loren Loverde. ''The potential housing bubble, the subprime situation, the high oil prices -- those have been in the media now for a year or more at least. We were more concerned in the second half of last year when growth slowed.'' REUTERS SYU SSC1033

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