Global PC Market Suffering First Decline Since Dot-Com Crash

For the first time since the dot-com bust of 2001, the PC market will see a contraction in unit shipments in 2009, according to a new report from research firm iSuppli.
The research firm blames falling IT spending and plunging desktop computer sales-shipments of which are likely to decline by 18.1 percent, or to 124.4 million units from 151.9 million units in 2008. Overall global PC shipments for 2009 are expected to decline by 4 percent, to 287.3 million units, from 299.2 million units in 2008.
“An annual decline in unit shipments is highly unusual in the PC market,” said Matthew Wilkins, a principal analyst with iSuppli.
“Even in weak years, PC unit shipments typically rise by single-digit percentages. The last decline-in 2001-was a 5.1 decrease in unit shipments due to the extraordinary impact of the dot-com bust, which caused inflated IT spending levels from the previous years to collapse,” Wilkins continued.
iSuppli includes entry-level servers in its definition of PCs, and units shipped are expected to fall by 9.5 percent, from 7.7 million in 2008 to 6.9 million units in 2009.
However, notebook shipments are expected to rise by 11.7 percent, to 155.97 million units-up from 139.6 million units in 2008. Netbook numbers, in particular, are expected to climb.
“Mobility is winning out in the PC market,” said Wilkins. “Businesses and consumers continue to embrace notebook PCs because of the benefits of mobility and the near-equal performance and feature set. This is cutting into desktop PC shipments.”
Tightened IT budgets, however, are “hitting desktop and server sales particularly hard,” he continued.
While 2009 numbers will ultimately be weak, compared with 2008, iSuppli expects an improvement in the third and fourth quarters. The firm expects second-quarter 2009 PC shipments, which it is now correlating, to be just 0.1 percent above first-quarter numbers. In the third quarter, however, shipments are expected to rise by 11 percent, and in the fourth quarter 8.9 percent.
In iSuppli’s global PC shipment forecasts going forward, 2009, with its -4.0 percent APG (annual percentage growth), completes the bottom of the slump. APG for 2010 is expected to be 4.7 percent, with 2011 crawling to 6.3 percent and 2012 to 7.0 percent.