IDC Sees PC Sales Slowing in Second Half of 2010

 
 
By Jeffrey Burt  |  Posted 2010-09-03 Email Print this article Print
 
 
 
 
 
 
 

IDC analysts say consumer purchases of PCs will slow in the second half of the year, but strong commercial sales will offset some of the weakness.

IDC analysts are predicting what others have also: Consumer sales of PCs will slow in the second half of 2010 after a strong first two quarters.

However, IDC pointed out in a report Sept. 2 that the softening in the PC market in the second half was not unexpected, and that worldwide a large number of sizable corporate IT projects had helped to bolster overall PC sales beyond expectations.

Still, because of concerns about the struggling economy and other factors, IDC reduced its overall 2010 PC shipment forecast from 19.8 to 17 percent over 2009 figures.

"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 said in a statement. "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. Its analysts noted that PC shipment growth grew an average of 14 percent per year during 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.

A strong rebound began in the fourth quarter of 2009, when shipments grew more than 17 percent, and continued with 25 percent growth in the first half of this year.

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

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

IDC is lowering its forecasts for mobile PCs and consumer PCs, and expects that netbooks will continue to have a strong role in the PC space, though they face increasing saturation and competition from mainstream notebooks and such devices as Apple's iPad tablet PC. Those challenges should lead to slower netbook sales in the future.

However, IDC is raising its forecast for desktop PCs, in part due to businesses of all sizes replacing their fleets of aging computers. In addition, sales of all-in-one PCs also are helping the desktop market.

IDC said it 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, helping to drive double-digit shipment growth in the U.S. PC market this year."

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 per year after 2010, IDC said.

Indications that the PC market is slowing are coming from a variety of sources. Intel, which reported 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, Gartner analysts said in a report Sept. 1 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 along with the sales of electronic systems, which appear to be slowing, the Gartner analysts said.

Gartner also readjusted its prediction for full-year PC sales growth, lowering it about 2 percent to 15.3 percent.

 
 
 
 
 
 
 
 
 
 
 

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