PC Growth Projected, Just Not as Much

As the U.S. braces for a possible economic slowdown, Stamford, Conn.-based research firm Gartner (NYSE: IT) cut its growth outlook for PC sales from the previous year.

The research firm is now predicting 10.9 percent growth for PC sales in 2008, a mark that’s down from the
2007 growth mark of 13.4 percent.

Gartner said it expects to see momentum in the notebook market propel strong sales for PCs worldwide. “We have been continuously surprised by the strength of mobile PCs, particularly in emerging markets,” George Shiffler, research director at Gartner, told InternetNews.com.

According to the report, improved design was a major factor in the increase in PC shipments.

Gartner traced 60 percent of the worldwide PC growth to emerging markets such as Asia, China, India, Latin America and Brazil.

“Emerging markets in general have done very well, provided they remain uncoupled by what’s happening in the U.S.,” he said.

Shiffler still sees growth from 2007, but said the 11 percent forecast could fall to around 9.5 percent if a recession occurs.

While the outlook is bright for PCs, the shadow of a possible economic slowdown hangs on the PC market. Although he doesn’t see the PC market as “recession-proof,” it won’t take a big fall. “10.9 percent growth by historical standards is still pretty good for the market,” Shiffler said.

“A deeper and more extended global slowdown emanating from the U.S. and China would slow PC unit growth even more by sapping mobile PC demand, slowing emerging-market growth, and delaying replacement activity,” he added.

According to Shiffler, PC demand from governments, businesses, and schools were a big contributor to PC growth.

A year ago, Gartner reported that the U.S. had fallen to third in the world behind Europe/Middle East/Asia and Asia/Pacific ahead of the United States.

Shiffler said replacements of PCs, particularly in businesses, could take a hit if the economy falters. “We could see weaker replacements than we’re counting on,” he said.

According to Shiffler, growth is mostly consumer-dominated in the U.S but is more even between consumer and businesses in emerging markets. And the potential recession could be consumer-led, he said, although businesses could cut back on replacements.

“The recession is going to affect PC shipments, but it’s certainly not going to do anything like it did to the market in 2001,” Shiffler said.

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