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    Slowing Consumer Demand Reduces PC Growth for 2011: IDC Report

    By
    Nathan Eddy
    -
    June 6, 2011
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      Worldwide PC shipments are now expected to grow by just 4.2 percent in 2011, down from a February forecast of 7.1 percent, according to the IDC Worldwide Quarterly PC Tracker. A combination of declining first-quarter shipments, an increasingly conservative economic outlook, relative saturation among developed market consumers and competing products will lead to slow growth in 2011 before a rebound in 2012, the company’s report noted. For 2012 through 2015, growth is still expected to fall in the 10 percent to 11 percent range.

      The company noted consumer PC purchases have been a cornerstone of PC growth over the past five years, and during this time a transition to low-cost portables helped drive purchases by new users in emerging markets as well as replacement and secondary systems in more mature markets. Consumer PC shipment growth averaged 18.9 percent from 2005 to 2007, almost 7 percent faster than commercial shipments. During 2008 and into 2009, consumer growth was actually faster at more than 21 percent, while commercial growth fell below 3 percent in 2008 and then dropped to -10.5 percent during the recession in 2009.

      The growth in 2009, “remarkably independent” of the economic pressures following the housing bubble, banking crisis and related recession, was largely fueled by the netbook boom. Consumers in mature regions snapped up more than 19 million netbooks in 2009 versus just 6.6 million the prior year, and the jump accounted for over 80 percent of volume growth in the segment. Emerging regions also got a bump from mininotebooks, which added 7 million units in 2009, accounting for roughly half of growth in portable PCs.

      However, the appeal of low prices for netbooks has given way to a number of factors, including relative saturation following this boom cycle, recognition of their limitations, and better competition from both mainstream notebooks and media tablets, which increased 31 million and 17.9 million units in 2010, respectively, versus just 1.3 million for mininotebooks.

      “Consumers are recognizing the value of owning and using multiple intelligent devices, and because they already own PCs, they’re now adding smartphones, media tablets and e-readers to their device collections,” said Bob O’Donnell, vice president of clients and displays at IDC. “And this has shifted the technology share of wallet onto other connected devices.”

      The report also noted consumers are increasingly affected by the prolonged recession-affecting not just housing, employment, equity markets and GDP, but also energy and food prices, and resulting in high debt and tight credit-much of which hits directly at consumer discretionary spending.

      The potential boost to the PC market from thinner designs, longer battery life, instant on, touch and other improvements will likely not be widely available until 2012 and will have to address price-sensitive buyers in order to drive higher levels of growth, IDC research indicated. The appeal of these future enhancements could be seen as another motive for consumers to delay the purchase of a new PC until they are available and to focus on other products in the meantime.

      Nevertheless, IDC said it expects significant growth in both consumer and commercial markets to continue beyond 2011. New designs, chips, operating systems, features and services, along with falling prices, will continue to make PCs more powerful, affordable and functional than ever before. Despite incursions by smartphones and media tablets, PCs have a large user base and ecosystem, and continue to represent the most comprehensive and affordable computing platform. Adoption by new users in emerging regions as well as replacements in more mature markets will continue to drive double-digit growth through the end of the forecast.

      “The PC market has definitely hit a slow patch,” said Loren Loverde, vice president of IDC’s worldwide consumer device trackers. “Nevertheless, the long-term growth drivers-first among which are growth in emerging markets, declining prices and growing functionality-remain intact, and the product and design innovations under way will keep PC growth healthy in the long term.”

      Nathan Eddy
      A graduate of Northwestern University's Medill School of Journalism, Nathan was perviously the editor of gaming industry newsletter FierceGameBiz and has written for various consumer and tech publications including Popular Mechanics, Popular Science, CRN, and The Times of London. Currently based in Berlin, he released his first documentary film, The Absent Column, in 2013.

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