The latest market research from iSuppli and Gartner show continued softness in the PC sales market, with sales expected to shrink year-over-year in 2009 for the first time since the Dot Com bubble burst in 2001.
Market research firm iSuppli predicts that global PC shipments will decline to 287.3 million units in 2009, down four percent from 299.2 million in 2008. iSuppli had previously forecasted 0.7 percent growth in PC shipments for the year. Other vendors had been reluctant to make annual predictions, instead sticking to quarterly estimates.
“An annual decline in unit shipments is highly unusual in the PC market,” said Matthew Wilkins, principal analyst for compute platforms for iSuppli in a statement. “Even in weak years, PC unit shipments typically rise by single-digit percentages. The last decline—in 2001—was a 5.1 decrease in unit shipments due to the extraordinary impact of the Dot-Com bust, which caused inflated IT spending levels from the previous years to collapse.”
The primary reason is a staggering 18.1 percent plunge in desktop shipments to 124.4 million units. Notebooks will rise by 11.7 percent this year to 155.97 million units, making this the first full year that notebook PC shipments will exceed desktops.
Entry-level servers—which iSuppli includes in its definition of PCs—also will suffer a decline, down 9.5 percent to 6.9 million units in 2009.
iSuppli projects Q2 PC shipments will be up 0.1 percent from the first quarter, but the second half of the year will be much better, with third and fourth quarter shipments up sequentially by 11 and 8.9 percent, respectively. That would be in line with Intel’s bullish and altogether positive projections made on Tuesday’s earnings call.
Slightly different view
Gartner has a slightly different view of things. Its numbers are based on sell-in to the channel, whereas iSuppli’s numbers are sell-through, which would explain its slightly higher estimate of 68.1 million units sold in the second quarter.
While that’s a five percent decline over the second quarter of 2008, it’s better than the 9.8 percent drop Gartner had been anticipating.
Hewlett-Packard remained in first place, with 2.8 percent year-over-year growth in marketshare. It held 19.6 percent of the market as of Q2 2009. In second place and falling fast was Dell, down 17 percent YOY to 13.6 percent. Rising faster was Acer, the Asian sensation that shot up 34.2 percent YOY to 13.5 percent market share.
The reasons for both Dell’s drop and Acer’s surge is the consumer market. Intel chief Paul Otellini said on the earnings call that the consumer market is much stronger than business as companies delay purchases and system refreshes. Acer is totally invested in the consumer market while Dell is very heavily dependent on business, notes Gartner analyst Mika Kitagawa.
“Dell has a huge dependence on the professional market. Their consumer service is quite small,” she told InternetNews.com. “Low-priced consumer mobile PCs are where you want to be. If you are not in that market, then you are going to lose marketshare. That’s why Acer is doing so well, no question.”
U.S. PC shipments declined just 1.2 percent, which is a lot better than the 12 percent decline Gartner had been expecting. Desktop PCs showed a double-digit decline while mobile PC shipments were up 20 percent.
The EMEA (Europe, Middle East, Africa) wasn’t so pretty. Sales fell 10.9 percent over 2008 due to the overall poor economy in that part of the world, with central Eastern Europe down more than 30 percent.
Latin America shipments fell 16.6 percent year-over-year, while Asia/Pacific bumped up slightly, by 2.3 percent overall. China showed the real strength, up seven percent. Japan, mired in another recession, fell 3.2 percent.
Kitagawa acknowledged that desktop sales are declining but said that it’s not just due to a shift to laptops. Overall, the market is down. “Many companies don’t feel comfortable replacing PCs due to the economy,” she said.
“It’s true the desktop market is declining and mobile is growing, but that was a trend in the past and the overall market was positive. So I don’t say it was the desktop market is down, therefore the entire market is down. That’s kind of a simple view. You have to find a reason the desktop market is shrinking,” she added.
That comes from three things: consumers in general are shifting from desktops to mobile; people are not replacing old systems so sales across the board are down; and the desktop PC is popular in emerging markets, and those markets (like APAC and Latin America) are down or struggling.