Global PC Sales Fall, First Time In Six Years - InformationWeek

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Global PC Sales Fall, First Time In Six Years

The weakening global economy was clearly the dominant factor in stemming growth, IDC said.

Global PC shipments in the fourth quarter fell for the first time in six years, a victim of the economic downturn that hit PC purchases harder than anticipated, a market research firm said Wednesday.

Shipments dropped 0.4% in the quarter from the same period a year ago to 77.3 million units and 2.5% from the third quarter, IDC reported. The decline followed a half-dozen years of rising shipments, with the last five averaging increases of 15%.

The weakening economic environment, which included falling home and stock prices and the increasing difficulty of obtaining credit from banks, was clearly the dominant factor in stemming growth, IDC said. Vendors could do little to reverse the tide, despite offering low-cost portables and holiday promotions.

Growth in laptop shipments was cut roughly in half to about 20% from nearly 40% in the first three quarters of 2008. The desktop market was also hit hard, falling about 16% in the quarter from a year ago after only a small decline earlier in the year.

However, there were some bright spots in IDC's findings. Shipments of mini-laptops, so-called netbooks, reached 5 million units in the fourth quarter, bringing the total for 2008 to about 10 million units, which accounted for 7% of overall mobile PC shipments. Shipments of the low-cost systems with screen sizes of 10 inches or less are expected to double in 2009, IDC said.

Also, despite the dramatic downturn in the last quarter of the year, the full year saw PC shipments increase 10.5% over 2007 to 297.2 million units. That number was on par with 2006, when vendors struggled with the transition from desktops to portables and replacement rates fell because of economic uncertainty and Microsoft's pending launch of Windows Vista. Shipments of mobile PCs surpassed desktops in the third quarter, according to iSuppli.

Nevertheless, the PC market overall is weakening, and recovery may be a ways off. "It is tempting to argue that international markets will be less affected, or that low prices and the transition to portables will limit the impact, but the market has taken a serious hit and the competitive environment along with a race to low-cost portables could easily undermine profits from mobile computing," Loren Loverde, program director for IDC's quarterly PC Tracker report, said in a statement. "I won't be surprised if recovery gets pushed further into 2010 as this crisis unfolds."

In the United States, where business and consumer spending is falling as credit continues to tighten and unemployment rises, "the first half of 2009 looks pretty shaky as the economic fundamentals need to recover before spending on PCs will resume," IDC analyst Doug Bell said.

Of the top five vendors worldwide, No. 2 Dell saw the biggest year-to-year decline in shipments in the fourth quarter at 6.3%, according to IDC. Lenovo, the fourth-largest PC maker, was second with a drop of 4.8%.

Hewlett-Packard, the market leader, managed to beat the overall market with a 3.1% increase, but the biggest winners were third-place Acer and No. 5 Toshiba, which increased shipments by 25.3% and 20.2%, respectively. Both vendors benefited from significant increases in sales of portable PCs.

All of the top five vendors saw growth in shipments for the full year.

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