2Q09 Worldwide PC Forecast Indicates Likely Return to Market Growth by Fourth Quarter of This Year, but Vendors Should Brace for Two More Difficult Quarters
Worldwide PC shipments are on pace to reach 274 million units in 2009, a 6 percent decline from 2008 shipments of 292 million, according to the latest forecast by Gartner, Inc. Gartner now expects the PC market to post positive growth in the fourth quarter of 2009, setting the stage for a healthy market recovery in 2010 with units forecast to grow 10.3 percent.
Gartner's latest forecast is somewhat brighter than its preliminary forecast from mid-May, which anticipated a 6.6 percent unit decline in 2009, and considerably stronger than its last detailed forecast from March, which projected a 9.2 percent unit decline. However, analysts urged caution and said that while the market appears to be strengthening, it is still premature to say that the worst is over and the market is recovering.
"PC unit growth was stronger than we expected in all markets but Eastern Europe in the first quarter of 2009. In particular, consumer shipments were much stronger than we anticipated," said George Shiffler, research director at Gartner. "However, professional shipments continued to struggle, and we think much of the growth in consumer units was due to vendors and the channel restocking inventories rather than an upsurge in demand. We expect units to contract roughly 10 percent year over year in both second and third quarter 2009 before they post positive growth in the fourth quarter."
Mini-notebooks continued to cushion the market's decline in the first quarter of 2009. Units remain on track to reach 21 million this year and 30 million next year. "However, mini-notebook units posted their first quarter-over-quarter decline in the first quarter of 2009," said Mr. Shiffler. "While this was in part the result of the general contraction in PC shipments to the EMEA region, it also reflects increasing competition between mini-notebooks and low-end mainstream mobile PCs as the former evolve toward larger screen sizes, and the latter continue to drop in price. In effect, mini-notebooks are becoming just another value-based mobile-PC offering."
Mobile-PC units are forecast to total 149 million units in 2009, a 4.1 percent increase over 2008, but spending on mobile PCs is expected to decline 12.8 percent as mobile-PC average selling prices (ASP) continue to drop at an unprecedented rate. The drop in mobile-PC ASP reflects a pronounced market shift to lower-priced mobile PCs, driven in part by mini-notebooks but also by performance-for-price improvements in low-end mainstream mobile PCs. Desk-based PC units are now expected to total 125 million, a 15.7 percent decline compared with 2008; spending is expected to decline 26.6 percent.
"Both mobile-PC and desk-based PC units are being held back by users extending PC lifetimes and delaying replacements in response to the ongoing economic slowdown," Mr. Shiffler said. "The good news for the industry is that delayed replacements won't be lost replacements. Our research indicates replacements should grow strongly in 2010 and 2011, helping to power the market's recovery."
Gartner analysts said the impact of Windows 7's release in October on the PC market is likely to be very modest.
"Although the buzz surrounding Windows 7 has generally been quite positive, we don't expect the market to significantly deviate from its normal seasonal trends in reaction to its release," said Mr Shiffler. "Unless Microsoft mounts a major marketing campaign in support of Windows 7, we think consumers will simply adopt the new operating system (OS) as they would normally buy new PCs and/or replace old ones. As for professional users, we still expect them to put off adopting the new OS for at least a year until they have fully tested their applications against it."