Windows 8, Ultrabooks Could Invigorate a 'Depressed' PC Market: IDC

The worldwide PC market is slumping, in need of back-to-school sales and new Ultrabooks and tablets running Windows 8, according to IDC. Recent earnings announcements have suggested as much.

The worldwide PC market is expected to grow in 2012, if only by a fraction of a percentage, IDC reported Aug. 23, citing economic conditions and consumers' wait-and-see attitudes for the market's second consecutive year of growth below 2 percent.

By year's end, IDC expects PC totals to creep to 367.2 million, up from the 363.9 million that closed out 2011. Between 2013 and 2016, the market is now expected to grow at a compound annual rate of 7.1 percent, down from the previously forecast 8.4 percent.

This year, help should come in the form of back-to-school sales and the release of Microsoft's Windows 8, which will remove the barrier for the release of a trove of Ultrabooks and tablets running the new OS, which will debut Oct. 24.

"The U.S. market will remain depressed until Windows 8 products hit the shelves in the fourth quarter of 2012," IDC research director David Daoud said in a statement.

Jay Chou, a senior research analyst at IDC, added that "factors such as Windows 8 coupled with Ultrabooks could present a positive turn of events next year, but it also faces some initial hurdles, chief of which is that buyers must acclimate themselves to an operating system that is a dramatic departure from existing PC paradigms. The PC ecosystem faces some work to properly educate the market."

This year, the firm expects a negative growth rate for both desktops and portable PCs in mature markets-in emerging markets, portable PCs will be the highlight, with a 6 percent growth rate-but next year, again, things will look up, with high points being a growth rate of 12.5 percent for mobile PCs in emerging markets and 9.9 percent worldwide.

In July, Gartner reported that 87.5 million PCs shipped during the second quarter, led by Hewlett-Packard, whose shipments fell by 12.1 percent from a year ago; Lenovo, up nearly 15 percent; and Acer, which with modest 3.6 percent growth managed to push Dell to the No. 4 spot.

HP announced its fiscal third-quarter earnings Aug. 22, revealing the challenge of transitioning from personal PCs, printers and the other hardware to more enterprise-grade products and solutions. CEO Meg Whitman described HP as being "under attack from several sides" and said the company is "going to fight and defend our No. 1 market position with a new lineup of PCs and a Windows 8 tablet for enterprises."

The day before, Dell's earnings announcement told a similar story. The struggling PC maker is also expanding its enterprise infrastructure and services, and announced declines in revenue and income.

While Dell's CEO may not have also said so aloud, Dell, too, is under attack-by Lenovo. Earlier this month, Lenovo General Manager Thomas Looney called Dell "the weakest kid on the playground" and told Bloomberg he was going after Dell's customers in the government and education markets.

With its PC business thriving-its shipments increased by more than 24 percent during the second quarter, while the overall industry was down 2 percent-Lenovo is also going after the smartphone market. Its phones have been incredibly successful in China, posting triple- and quadruple-digit growth over the last five quarters, and it plans to try and mimic that success in the Philippines, according to research firm Technology Business Research.

Lenovo also introduced a Windows 8-running tablet at a New York City event this month, where Dilip Bhatia, general manger of Lenovo's ThinkPad business unit, remarked, "This is a fantastic time in the industry."