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PC sales to grow more slowly, IDC concurs

Sep 3, 2010 — by LinuxDevices Staff — from the LinuxDevices Archive — views

IDC analysts say consumer purchases of PCs will slow in the second half of the year, but that strong commercial sales will help offset some of the weakness. PC shipments will be up by 17 percent year-over-year, the research firm added, lowering its previous prediction of a 19.8 percent gain over 2009.

IDC analysts say they're expecting to see what others also have predicted: that consumer sales of PCs will slow in the second half of 2010 after a strong first two quarters.

However, the research firm added that the softening in the PC market in the second half was not unexpected, and that worldwide, a strong number of large corporate IT projects were helping to bolster overall PC sales beyond expectations.

Still, because of concerns over the struggling economy and other factors, IDC reduced its overall 2010 PC shipment forecast from 19.8 percent to 17 percent over 2009 figures, the market research firm said in a report released yesterday.

"Despite reducing growth projections for the year, the outlook for the PC market in the second half of 2010, as well as longer term, remains one of solid double-digit gains," IDC analyst Loren Loverde stated. "Strong demand, aggressive pricing, and active product development will continue to fuel solid growth through the next several years."

The worldwide recession that swamped the IT industry starting at the end of 2008 is continuing to influence the PC market, according to IDC. The analysts noted that PC shipment growth grew an average of 14 percent per year for the six years before the recession hit.

In the fourth quarter of 2008 and throughout the first half of 2009, as the recession took hold, shipments declined significantly. The strong rebound began in the fourth quarter of 2009, when shipments grew more than 17 percent, and 25 percent in the first half of this year.

IDC analysts said they didn't expect that that pace to continue, so the 11.8 percent growth they're expecting for the second half of 2010 makes sense when viewed as part of an overall slow and steady economic recovery.

The slower growth in the second half should not overshadow the fact that the market continues to grow, Loverde said.

IDC analysts said they are lowering its forecasts for both mobile PCs and consumer PCs, and added that netbooks will continue to play a strong role in the PC space, though they face a growing saturation, competitions from mainstream notebooks and such devices as Apple's iPad tablet PC. Those challenges will lead to slower netbook sales in the future.

However, IDC is growing its forecast for desktop PCs, which in part is due to enterprises and SMBs replacing their fleets of aging computers. In addition, sales of all-in-one PCs also are helping the desktop market.

IDC expects the growth in commercial PC sales to outpace consumer growth through much of 2011.

"After several years of carrying the load in terms of shipment growth for the PC industry, the U.S. consumer market is getting fatigued," IDC analyst Richard Shim said in a statement. "Challenged with less discretionary income than in previous years, as well as a slew of new devices to divert their attention, fewer U.S. consumers are expected to update their PCs this holiday season. Fortunately, large businesses are expected to reinvest in their PCs over the next several quarters."

Mobile PCs will continue to be the top form factor in the market, accounting for more than 70 percent of PC sales by 2014, but the average selling price is dropping, which will mean yearly revenue increases of 3 to 5 percent a year after 2010.

Indications of a slowing of the PC market are coming from a variety of sources. Intel, which saw extremely strong financial numbers in the first two quarters of 2010, downgraded its third-quarter forecasts, pointing to a softening of consumer PC demand.

In addition, analysts with market research firm Gartner said in a report Sept. 1 that they expect semiconductor sales to slow in the second half of 2010, after a very strong first half of the year. Sales in the second half will fall below seasonal norms as the market moves inline with the sales of electronic systems, which appear to be slowing, the Gartner analysts said.

That report came a day after Gartner readjusted its full-year PC sales numbers, dropping about 2 percent to 15.3 percent.

Further information

The IDC press release from which the above information is extracted may be found on the company's website, here. Further details of the firm's Worldwide Quarterly PC Tracker research may be found here.

Jeffrey Burt is a writer for our sister publication eWEEK.

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