Framingham (MA) – IDC updated its PC market forecast and there were few surprises and if you have been following the industry and the general economic drama of recent weeks you already know the bottom line. The full impact of the credit crunch, downsizings and trimmed corporate and consumer spending will show its ugly face next year. But there is good news in the numbers released as well. You just need to look a bit closer.
“Demand for personal computers is expected to slow quickly” is part of the first paragraph in IDC’s press release outlining the market research firm’s market expectations for 2008 and beyond. The first paragraph ends with these two sentences:
“IDC expects worldwide PC shipments to grow just 3.8% in 2009 with shipment value falling by 5.3%. This is considerably slower than second quarter projections of 13.7% growth in units and 4.5% in shipment value. The outlook for full year 2008 and 2010 have each been lowered a couple percent to 12.4% and 10.9%, respectively, with growth above 12% for 2011 and 2012.”
So, if IDC is somewhat on the right path here (we know that very few PC market predictions have been correct in the past), it means that the 2008 market will be still growing (thanks to a solid first half), but 2009 looks like the weakest year for PCs in seven years. The market research firm expects U.S. PC and server sales will contract by 2.9% to 67.1 million units and the worldwide growth will drop from 12.4% this year to only 3.8% in 2009. The U.S. may see a slight increase of 2.4% in 2010, and grow by 4.4% and 4.6% in the following years.
Worldwide growth will pick up faster, according to IDC, to 10.9% in 2010, to 12.6% in 2011 and 12.9% in 2012.
The scenario is somewhat similar to, albeit not quite as dramatic, the drop in shipments in 2001 (during the dotcom bubble burst) and in 2002. Compared to 2000, PC sales declined by 5.1% in 2001, according to IDC. 2001 shipments in the U.S. even dropped by 12.2%. Recovering from one of the worst years in PC history – and one of the worst quarters for PC sales in the U.S. (Q4 2001) – PC shipments increased by 1.6% in 2002. However, it is clear that the base levels of 2000 and 2008 are quite different. About 134 million PCs were sold in 2000, while IDC estimates that the tally will top 302 million PCs in 2008.
But as bad as IDC’s forecast looks, there is even worse news hidden in the forecast; but there is positive news as well. The really bad part is that if you are a vendor focused on desktop PCs and on x86 servers you may be in for a big storm. This segment is expected to decline in the U.S. by 7.0% in 2008, by 12.9% in 2009 and by 7.8% in 2010 – with additional declines down the road. On a worldwide basis, desktops and x86 servers are expected to drop by 6.7% in 2009 but show slight gains beginning in 2010. But that isn’t really that new as the desktop segment has been contracting especially in the U.S. for some time now.
But here is the good news: Mobile systems, such as notebooks and netbooks, have been the growth drivers in recent years and will continue to grow through the downturn of the industry, according to IDC. The segment will grow in the U.S. by 15.6% this year, by 6.7% next year and by 10.7% in 2010. Internationally, the growth will be even stronger: 35.1% in 2008, 15.2% in 2009 and 19.5% in 2010. By 2012, there PC manufacturers will sell twice as many notebooks as desktop PCs and servers, IDC predicts.