PC market growth slowing in 2011, expected to rebound in 2012

The PC market has hit a slow patch, but long-term growth drivers remain intact, IDC reports.

By Suzanne Deffree, Managing editor, news -- EDN, June 6, 2011

International Data Corp (IDC) has lowered its expectations for worldwide PC shipments in 2011, now predicting only 4.2% year-on-year growth.

The new estimate is down from IDC expectation released in February for 7.1% growth this year. In lowering its forecast, IDC noted a combination of declining Q1 shipments, an increasingly conservative economic outlook, relative saturation among developed market consumers, and competing products as factors that will lead to slow growth in 2011.

After this year, however, growth is expected to rebound. For 2012 through 2015, growth is still expected to be in the 10 to 11% range (see table below).

IDC reminded that consumer PC purchases have been a cornerstone of PC growth over the past five years, during which time 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% from 2005 to 2007, almost 7% faster than commercial shipments. During 2008 and 2009, consumer growth was more than 21%.

Growth in 2009 remained independent of economic pressures and was largely fueled by netbooks. However, the appeal of low-priced netbooks has given way to a number of factors, IDC said, 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 netbooks.

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

Still, consumer discretionary spending continues to be restricted while the economy recovers. IDC noted that 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. In fact, IDC cautioned that the appeal of these enhancements could be a motive for consumers to delay the purchase of a new PC until they are available and to focus on other products in the meantime.

According to IDC, Q1 PC shipments were down 1.1% from the prior year, with a decline of 4.4% in consumer shipments that was only partially offset by 3% growth in commercial segments. IDC expects significant growth in both consumer and commercial markets to re-emerge beyond 2011, despite incursions by smartphones and media tablets. 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 market researchers said.

"The PC market has definitely hit a slow patch," said Loren Loverde, vice president of worldwide consumer device trackers at IDC, in the statement. "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."


PC shipments by region and form factor, 2010-2015 (shipments in millions)

Region	Form factor	2010	2011*	2012*	2013*	2014*	2015*
Mature markets	Desktop PC	57.7	54.9	56.0	54.5	53.4	53.3
Mature markets	Portable PC	108.8	105.4	116.7	127.3	141.3	153.6
Mature markets	Total PC	166.5	160.3	172.7	181.7	194.6	206.9
Emerging markets	Desktop PC	88.1	92.1	96.3	100.0	102.6	104.9
Emerging markets	Portable PC	92.3	109.2	129.5	156.7	190.6	229.7
Emerging markets	Total PC	180.5	201.3	225.8	256.7	293.2	334.6
Worldwide	Desktop PC	145.8	147.0	152.3	154.5	156.0	158.3
Worldwide	Portable PC	201.2	214.6	246.2	283.9	331.8	383.3
Worldwide	Total PC	347.0	361.6	398.5	438.4	487.8	541.5

*Forecasts

Source: IDC Worldwide Quarterly PC Tracker, May 2011

• Mature markets includes US, Western Europe, Japan, and Canada.
• Emerging markets includes Asia/Pacific (excluding Japan), Latin America, Central and Eastern Africa, Middle East and Africa.