PC Sales Stronger Than Expected in Q2

What slowdown? PC sales are still doing very well, with emerging nations leading the way but even mature markets like the U.S. are on a buying spree. The latest Gartner estimates forecast worldwide PC shipments will grow 12.3 percent in 2007 and 11.0 percent in 2008.

Mobile PCs remain the most popular hardware being sold, with Gartner projecting that notebooks will account for 40 percent of sales this year, or 104 million of the 260 million PC sold in 2007. In 2006, notebooks account for 80 million of the 231 million PCs sold, for 35 percent of the market. Gartner estimates that laptop sales will surpass desktop sales around 2010.

Still, desktop PCs remain strong, and George Shiffler, the research director at Gartner who did the study, admits he’s not sure why. “Our view is the desk space market is on the tail end of a replacement cycle,” he told InternetNews.com. “So growth there took us by surprise.”

He said the pop in desktops was concentrated in the U.S. and Canada and was attributable to some strong spending in the public sector and stronger spending by larger accounts. He also said any pop from Microsoft’s, now not so new, Vista operating system is still yet to show up.

“Vista doesn’t have enough must-have features to stimulate people to replace their PC earlier than they might or go out and buy a new one,” said Shiffler.

Emerging markets accounted for 70 percent of the growth from the first half of 2006 through the first half of 2007, even though this segment accounted for just 42 percent of shipments in the first half of 2007.

Gartner expect mature markets (the U.S., Canada, Europe, Japan) to average just 7.0 percent unit growth this year and next, while emerging markets will average 18.6 percent unit growth during the same time period.

The real strength is in China, India, Brazil, Mexico, Chile and Argentina. However, Shiffler cautions that volatility in global financial markets could impact the future projections, particularly as relates to the South American countries. “I think the whole macroeconomic picture clouds things and raises the possibility that there is more downside risk to our forecast than upside risk,” he said.

The projection for the U.S. is a slow third quarter, despite being the back to school quarter, with the fourth quarter picking up due to holiday and end of year sales. China, on the other hand, will remain very strong through the next few quarters, as will Latin America.

These markets aren’t going for the lowest priced gear, either. HP sells well in South America and Asia, though there are also plenty of local providers and white box vendors in those countries as well, said Shiffler.

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