Computer shipments have declined for the second time in the industry's history, though Dell Computer and the Asian market continue to expand their influence. Shipments of PCs declined 5.1 percent worldwide in 2001 compared with the previous year, according to preliminary figures released on Thursday by market researcher IDC. At the same time, shipments in the United States dropped by 12.2 percent. For the fourth quarter, worldwide shipments dropped 6.1 percent from the previous year and US shipments dropped 8.5 percent. However, sales picked up globally and in the United States compared with the third quarter. Gartner, a competing market researcher, released results on Thursday that were slightly more optimistic, tallying a 4.6 percent decline in worldwide shipments to 128 million units. Meanwhile, US shipments were down 11.1 percent to 44 million units, according to Gartner. The figures include shipments of desktops, notebooks and Intel-based servers. According to Gartner, 2001 marked only the second time the PC market has shrunk. The market also contracted in 1985. Although PC sales picked up from the third quarter to the fourth quarter, the overall picture apparently won't improve any time soon. Part of the sequential surge in the fourth quarter, which included a drift toward higher-priced PCs, could be attributed to the return of consumer confidence after the response to the 11 September terror attacks. Corporate buyers, however, remain skittish, and sustained demand from these customers may not materialize until at least the second half of 2002. "I'm not ready to say we've turned the corner," said Roger Kay, an analyst at IDC, who predicted that 2002 shipment growth might be flat at best. Gartner analyst Charles Smulders was equally cautious. Gartner figures show a sequential improvement in worldwide PC shipments at the end of the year, from 30.41 million units in the third quarter to 34.86 million in the fourth quarter. But much of the difference can be attributed to business purchases delayed in the immediate aftermath of the 11 September terror attacks, he said. "A lot of shipments were moved" from the third quarter to the fourth, Smulders said. "I think the effect is to artificially bolster (fourth quarter) results." Still, Gartner had modestly optimistic hopes for 2002, predicting worldwide growth of about 4 percent for the year and a 4 percent decline in the United States. Select pockets of the PC market are shining, however. Dell, for instance, continues to expand its market share. The Round Rock, Texas-based PC maker was the sole top-five PC maker to gain share. Dell's share in the United States in the fourth quarter came to 27 percent, the largest percentage ever held by any company, according to Kay. Worldwide, Dell's market share in the fourth quarter increased from 11.7 percent in 2000 to 14.1 percent in 2001. Gartner had similar figures, giving Dell the top position with 13.3 percent market share worldwide in 2001, compared with 11.1 percent for former leader Compaq. In the United States, Dell had a commanding 24.5 percent of the PC market, compared with 12.5 percent for Compaq. Smulders noted that if Compaq's controversial merger with Hewlett-Packard goes through, the combined companies' market share will still fall below Dell's in the United States. "Dell has really solidified their position," he said. Dell has also continued to expand its advantage in lower manufacturing costs over its nearest rival, Compaq, according to Ashok Kumar, an analyst at US Bancorp Piper Jaffray. Perhaps the biggest issue facing Dell is whether it can internally sustain the trajectory. "There is a scale issue where they are hitting the law of large numbers" Kay said. HP also saw a surge in U.S. consumer demand in the fourth quarter, growing faster than competitors, according to IDC. Nonetheless, the company saw overall shipments -- which includes corporate buying -- decline in the United States and around the world for the same period. Meanwhile, Gateway and Compaq were the big losers. Gateway saw its US market share in the fourth quarter decline by nearly 36 percent to 6.2 percent. Compaq's share, by contrast, dropped nearly 25 percent in the United States in the fourth quarter to 12.5 percent. Its global share slid 19 percent to 11.1 percent. Compaq is No. 2 globally and in the United States, although a year ago it was No. 1 in the world. Smulders said there is somewhat of a truce in the battle for PC market share, thanks to Dell's relentless price cutting. "Companies like Gateway are clearly focusing more on profitability than market share now," he said. The Asia-Pacific region, which excludes Japan, was the only area where shipments grew last year. Earlier this week, Intel reported that it shipped more chips to Asia in 2001 than in North America for the first time. However, shipments in Japan dropped, and the country will see double-digit declines for the next few quarters, according to IDC. At the same time, the slow return of corporate buying will continue to hamper US and European sales. Smulders said Asia represents one of the few growth areas for PC makers, but US companies will have to be flexible and agile to compete with manufacturers there, such as China's Legend Holdings. "I think there are significant challenges for overseas vendors, but it can be done," he said. "If you look at Latin America, some of the US vendors have done very well over there." PC sales first began hitting a wall in August 2000. Despite sunny expectations earlier that year, buying suddenly lurched to a stop in the summer. Still, US shipments grew 10.3 percent in 2000 compared with the previous year, while growing 14.5 percent worldwide, according to Gartner. For a round-up of the latest tech business coverage, see the Business News Section. Have your say instantly, and see what others have said. Click on the TalkBack button and go to the ZDNet news forum. Let the editors know what you think in the Mailroom. And read other letters.