PC Industry Revenue To Decline Next Year - InformationWeek

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Infrastructure // PC & Servers

PC Industry Revenue To Decline Next Year

IDC lowered its global forecast for PC shipments, saying the economic downturn has led to a quick drop in demand.

Market researcher IDC on Wednesday lowered its global forecast for PC shipments, saying the economic downturn has led to a quick drop in demand.

Shipments in 2009 would grow just 3.8% from this year, with total value of the units shipped falling by 5.3%, IDC said. Previous projections were for 13.7% growth in units and a 4.5% increase in shipment value.

IDC lowered its shipment outlook for this year and 2010 to 12.4% and 10.9%, respectively. Growth in 2011 and 2012 is expected to rise above 12%.

Sales in general are still being driven by demand for laptops, falling PC prices, and the need to replace older systems. Nevertheless, consumers and businesses will be "much more conservative in their purchases over the coming year or two, and while low prices will remain essential, they will not drive volumes as they did the past few years," IDC analyst Loren Loverde said in a statement. Sales of low-cost mini-notebooks are expected to help boost shipments, but also lower overall shipment value.

In the United States, declining shipment growth in the consumer market and a stagnant commercial market is expected to intensify competition among PC vendors. "Consolidation is expected as PC makers tough out the competitive climate and lower than expected volumes and thinner margins," IDC analyst Richard Shim said.

Among the factors taking down the overall PC market is the slowdown in emerging markets in Latin America, Central Europe, and the Middle East and Africa, which had been among the fastest-growing markets over the last several years, as falling prices helped first-time buyers. A rising dollar and restricted credit were among the factors hurting PC demand.

IDC defines PCs as including desktops, laptops, ultraportable systems, and x86 servers.

IDC is only the latest research firm to lower PC forecasts. ISuppli last month slashed its 2009 projections for shipments by nearly two-thirds because of the rapidly deteriorating conditions in the global economy and financial system.

The market researcher said shipments would increase next year by 4.3%, compared with 2007. In 2010, shipments would rise by 7.1%. ISuppli had previously forecast increases of 11.9% and 9.4%, respectively.

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