RealTime IT News

PC Sales Hanging Tough, But for How Long?

Worldwide PC shipments reached 80.6 million units in the third quarter of 2008, a 15 percent increase over the same period in 2007, according to a new survey from Gartner. While that represents a nice growth burst, the devil is in the details.

The U.S., plagued by economic concerns and a credit crisis, grew only 4.6 percent. The strongest segment of the world, Europe, Middle East and Africa (EMEA), grew thanks to the popularity of netbooks/mini-notebooks, which are under $500.

As if the U.S.'s problems aren't bad enough, Asia is being hit with its own slump, with China suffering from inflationary problems that are causing its explosive economy to stall out. Why is not certain. It could be a post-Olympics breather or the country is feeling the impact of the U.S. and Europe's problems.

"That's a scary picture, because China is a leader of all those emerging markets, and also China is the second-largest PC market after the U.S. market," said Mika Kitagawa, principal analyst for Gartner's Client Computing Markets group.

"Inflation is a problem all over Asia," she added. "The price of everything has gone up. So making PCs over there won't be a cheap solution any more because it's getting more expensive."

In the U.S., Dell (NASDAQ: DELL) widened its lead over HP (NYSE: HPQ) to sit atop the market with 5.12 million unit sales, 29.5 percent of the total market and six percent growth over 3Q07. HP had 4.45 million in unit shipments for 25.7 percent of the market and a 4.4 percent year-over-year growth rate.

Apple (NASDAQ: AAPL) was the star of the quarter, growing a remarkable 29.4 percent, putting it at number three for 1.64 million in unit sales and 9.5 percent of the market. Acer, which recently bought Gateway and Packard Bell, was right behind Apple, with 1.54 million in units for 8.9 percent of the market and 11.2 percent growth.

Worldwide, HP was the winner, with 14.78 million in units for 18.4 percent of the market and 15.1 percent year-over-year growth. Dell was second with 10.99 million units for 13.6 percent of total sales and 11.6 percent YoY growth. Acer, Lenovo and Toshiba round out the top 5 with 10.0 million, 5.89 million and 3.67 million in unit sales, respectively.

PC shipments in EMEA grew 25.9 percent from the third quarter last year, for the best market segment growth. Much of this came from netbooks and mini-notebooks, and this is reflected by the fact that Acer, which was quick to enter the netbook market, was the top vendor with 20.6 percent of shipments in the region. HP was second with 18.7 percent of shipments.

Asia/Pacific grew 13.3 percent, driven heavily by mobile PCs. Mobile PC shipments grew 43.6 percent over the prior year, while desktops grew a mere 0.8 percent year-over-year. Latin America was up 13.2 percent increase from the third quarter last year, and mobility is taking off there, too. Laptop PCs accounted for approximately 28 percent of overall shipments in the quarter, compared to 21 percent in the third quarter of 2007.

Gartner doesn't see things getting all that much better any time soon. "Christmas in the U.S. doesn't look really great at the moment," Kitagawa told InternetNews.com. "Back to school sales weren't really great, so I cannot find any reason why Christmas sales will be really fantastic. But we are cautious about our outlook of holiday sales."

Still, there won't be a decline in sales. Gartner expects PC sales to show single-digit growth in the U.S. Average selling prices, already painfully low for the vendors, continue to drop. So there is one positive in all this: there are bargains to be had.

"If you have the money, it's a great time to buy a computer," said Kitagawa.