IDC Sees Low-Cost Notebooks Driving Worldwide PC Shipments

While the U.S. economy continues to struggle, low-cost laptops such as the Asus Eee PC, the HP Mini-Note and others from Lenovo, Acer and Dell are continuing to keep the worldwide PC market growing at double digits. The IDC news is also a boost for Intel's Atom processor, which is the base for many of these low-cost notebooks.

While the U.S. economy is continuing its year-long struggle, the worldwide PC market is still growing at a double-digit rate and is receiving a boost from the newfound interest in low-cost notebooks such as the Asus Eee PC.

In a survey released Sept. 10, IDC found that worldwide PC shipments are expected to increase 15.7 percent in 2008 and reach a total of 311 million units by year's end. In June, IDC called for growth of 15.2 percent.

The IDC report also found that PC shipments would continue to grow by double digits through 2011, with shipments hitting 482 million by 2012, when growth is expected to slow to about 9.2 percent.

While it is a given that notebooks in both the consumer and enterprise markets are driving overall PC shipments, the IDC numbers seem to indicate that these low-cost notebooks, also called "netbooks," are continuing to increase in popularity.

In addition to emerging markets in China and India, notebooks such as the Asus Eee PC are also gaining popularity in mature markets such as Western Europe. While this part of Europe is experiencing an economic slowdown along with the United States, PC sales increased 23 percent in the second quarter of 2008 due in part to the appeal of low-cost laptops.

The success and buzz that Asustek Computer created with the Eee PC have led nearly all the other major vendors to create their own low-cost PCs that use either Intel's Atom processor or low-watt chips from Via Technologies.

Other such laptops on the market include Hewlett-Packard's HP Mini-Note, which uses Via processors, the Dell Inspiron Mini 9 and the Lenovo IdeaPad S10. The Dell and Lenovo notebooks both use the Intel Atom processor. These notebooks all cost between $499 and $349 in the United States.

While these notebooks are the hottest part of the mobile market right now, such PCs are also further eroding the average price of PCs, which could hurt vendors but will likely continue to increase consumer interest in buying a second or third notebook for a home. The growing interest in these types of notebooks is also a boon for Intel, which is trying to create a whole new industry of portable devices built around its Atom processors.

The question now is whether Advanced Micro Devices will enter the market. While AMD has sent conflicting signals about whether it will create a specific chip for the netbook market, some Web sites are pointing to leaked road maps that show a new line of processors for low-cost PCs.

In the United States, PC shipments are expected to top 70 million units by the end of 2008 compared with 67 million units in 2007. Desktop shipments are expected to decrease about 4 percent in 2008 in the United States, while notebook shipments will increase 17.7 percent. In the rest of the world, notebook shipments are expected to increase 44 percent and desktops nearly 3 percent, according to IDC.