Worldwide PC shipments were 31.4 million in terms of units for the first quarter, down 2.7% year-on-year and minus 8.9% sequentially, said a new report issued by International Data Corp. (IDC) here.

And according to Dataquest Inc., worldwide PC shipments were 32.7 million units in the first quarter, or flat in terms of growth over the same period last year. PC shipments in the United States reached 11.1 million units, a 2.3% increase from the previous year, said a new report issued on Thursday by Dataquest in San Jose.

The current estimate is for worldwide PC shipments to finish the year with a growth rate of 4%, according to Dataquest.

The decline in Q1 was expected due to seasonal factors, but the consumer and business PC sectors continue to remain soft.

"First quarter 2002 growth rates are based upon weak market performances in the same quarter a year ago, and therefore, despite the apparently better growth rate figures, in reality, both the U.S. and worldwide markets remain sluggish," said analyst Charles Smulders of Dataquest.

"Economic factors and business confidence continue to be major factors influencing PC spending," he said. "Global economic prospects appear to have improved significantly over the quarter, making the prospects of a return to buying in the fourth quarter more likely," he said.

Others also put positive spins on the results. "The good news is that the market is no longer contracting rapidly, and the gains made in the fourth quarter have not evaporated," said Loren Loverde, who tracks the market for IDC. "Nevertheless, we have yet to see key segments return to significant growth," Loverde said.

"The year-on-year comparison was much easier this quarter but emerging markets are struggling to maintain positive growth, the commercial segment continues to invest cautiously, and consumers will not come back into the market in force until later in theyear," the IDC analyst said.

PC shipments in the United States were nearly on par with a year ago, as the market transitioned from decline to recovery. First quarter shipments were down 0.4% year-on-year, while a sequential decline of 6.1% was modest, compared to the historical average of minus 10.4%, according to IDC.

"We're in slack-water conditions," said analyst Roger Kay of IDC. "That period between the tides when the sea is fully out but has not yet come back in," he said. "The good news is that the U.S. market has truly reached low tide and is turning around, albeit slowly."

In terms of growth, notebooks PC continue to outpace desktops in the United States. Consumer systems displayed a slightly-better-than-normal seasonal purchasing pattern, but commercial buyers are still moving slowly.

The European PC market is similar to the United States, as consumer and commercial buyers remain cautious and are spending on other priorities, according to IDC.

In Japan, the market declined continued in line with expectations. Economic weakness weighed on the market, particularly in the commercial segment, the report said.

Growth in Asia remains positive, but in the low single digits. Growth in China improved, while the region's second and third largest markets, South Korea and Australia, returned to positive growth, it added.