Saturday, September 10, 2011

Gartner Cuts PC Growth Estimates, Blaming Economy, Tablets

Lenovo IdeaPad Tablet A1

Gartner said that it cut its worldwide PC growth estimates for both this year and next, citing economic upheaval and an excess of PCs already on store shelves.

Worldwide PC growth is expected to top 364 million units this year, up 3.8 percent from 2010, according to a preliminary forecast from Gartner released on Thursday. By 2012, however, the market is expected to pick up, with a 10.9 percent increase over 2011, to 404 million units.

Gartner said that its original projections called for a 9.3 increase in units for 2011 and a 12.8 percent increase in 2012, which would have put the worldwide PC market at 400 million units by the end of 2011, not 2012. But a confluence of events – the economy, lower demand, and the way in which consumers think about "client" devices have meant that PC sales could remain lower than expected for years to come.

"Western Europe is not only struggling through excess PC inventory, but economic upheaval as well," said Ranjit Atwal, research director at Gartner. "U.S. consumer PC shipments were much weaker than expected in the second quarter, and indications are that back-to-school PC sales are disappointing. An increasing pessimistic economic outlook is causing both consumer and business sentiment to deteriorate in both regions. We're expecting consumer spending to tighten in response. Business spending will also tighten, but less than the consumer space."

Gartner said that it was looking for new mobile form factors to help kickstart the market next year: ultrabooks, for example, or tablets.

"More worrisome for the long term is that Generation Y has an altogether different view of client devices than older generations and are not buying PCs as their first, or necessarily main, device," Atwal said. "For older buyers, today's PCs are not a particularly compelling product, so they continue to extend lifetimes, as PC shops and IT departments repair rather than replace these systems."

"Media tablets have dramatically changed the dynamic of the PC market and HP's decision to rethink its PC strategy simply highlights the pressure that PC vendors are under to adapt to the new dynamic or abandon the market," added George Shiffler, research director at Gartner. "Vendors' tried and true business models are failing as traditional PC functionality is extended to other devices, and users continue to lengthen PC lifetimes. Vendors only seem to be flailing as they look for quick fixes to their problems. Unfortunately, the resulting chaos is just creating more confusion across the entire PC supply chain, impacting sell-in.


Source:http://www.pcmag.com/article2/0,2817,2392675,00.asp?kc=PCRSS05039TX1K0000760

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