IDC Reports PC Market Slowdown for 2009

The PC market reportedly isn't exempt from a disheartening domino trend, as the recession takes hold and some retailers fall prey to slowdowns in consumer spending.

 

The demand for personal computers is expected to slow quickly, according to research from IDC, which shows that worldwide PC shipments will grow only 3.8 percent in 2009 with shipment value falling by 5.3 percent.

 

This is significantly lower than second quarter projections of 13.7 percent growth in units and 4.5 percent in shipment value. The outlook for full year 2008 and 2010 have each been reduced a couple percent to 12.4 percent and 10.9 percent, with growth above 12 percent for 2011 and 2012.

 

In the short term, emerging markets in Latin America, Central Europe, the Middle East and Africa will be affected the most. Plummeting commodity prices, a rising dollar, and limited credit have had a dramatic affect on consumer and distribution channel financing.

 

Before the financial crisis fully reared its head, these regions had been some of the fastest growing markets as falling prices helped new users obtain systems. For 2009, Latin America and Central/Eastern Europe are expecting volume to fall through the third quarter. Volume will continue to grow in the Middle East and Africa, but at a much slower pace than in experienced in the past.

More developed regions will also be affected by a slowing demand and are also expecting less growth next year. Although the credit crunch will have a big impact on spending in these regions too, a bigger portion of the market will be able to ride out the storm.

 

For 2009, volume growth in the more established regions has been lowered by 4 percent to 9 percent for 2009. Shipments in the United States are expected to fall by almost 3 percent with low single-digit increases in the years to come. Japan and Canada will see little growth for a couple years as well. Western Europe, on the other hand, has been slower to feel the credit crunch, and affordable notebooks remain a huge driver, so growth is expected to continue at 6 percent, although this is well below growth of more than 20 percent in 2008.

 

Asia/Pacific excluding Japan (APeJ) is also feeling the strain of the economy, although growth is not slowing as quickly as in other emerging regions, and total growth remains above the more mature regions. Shipments in APeJ are predicted to see a 7 percent increase in 2009 and will grow about 18-20 percent in subsequent years. This makes APeJ the fastest growing region throughout the forecast.

 

“Portable PC adoption, falling prices, and system replacements remain the key drivers,” explained Loren Loverde, director of IDC’s (News - Alert) Worldwide Quarterly PC Tracker. “Low-cost mini notebooks will help volume but pressure margins and revenues. Consumer and commercial segments will be much more conservative in their purchases over the coming year or two, and while low prices will remain essential, they will not drive volumes as they did the past few years.”

 

"Declining shipment growth in the consumer market along with the relatively stagnant commercial market will lead to fewer opportunities and more intense competition in the U.S. PC market," said Richard Shim, Personal Computing research manager. "Consolidation is expected as PC makers tough out the competitive climate amid lower than expected volumes and thinner margins."

 

IDC's Worldwide Quarterly PC Tracker collects PC market data in 55 countries by vendor, form factor, brand, processor brand and speed, sales channel and user segment. The company’s research includes historical and forecast trend analysis as well as price band and installed base data.

 

For more than 44 years, IDC has been a global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. IDC helps IT professionals, business executives, and the investment community make fact-based decisions on technology purchases and business strategy.