IDC: PC growth to slow to 0.9% this year

IDG News Service - Growth in the PC market is expected to be slower than last year, after mid-year shipments slowed as consumers were hit by weak economic conditions, and also postponed purchases to evaluate Windows 8 and Ultrabook products while considering spending on media tablets and smartphones, IDC said.

The PC market is expected to grow by only 0.9% this year, down from 1.7% last year, although growth may pick up to 6.5% in 2013, the research firm said on Thursday.

Global PC shipments during the year are forecast to be 367 million with portable PCs accounting for 214 million units, IDC said. "Product updates later this year should revive PC growth, but it will be a more pronounced competitive environment and there is likely to be some confusion among buyers about new product features as well as where they will get the most for their money," it added.

Emerging markets, which include Asia Pacific excluding Japan, Latin America, Central and Eastern Africa, Middle East and Africa, saw slower growth mid-year, while mature markets like the U.S. have seen volume decline, the research firm said.

The U.S. market is expected to end the year with shipments falling by 3.7%, marking a second consecutive year of contraction, as among other things back-to-school shipments have fallen short of expectations, despite prices falling to their lowest levels.

Growth in emerging markets for PCs is expected to drop to 2.5% in 2012 from 11% a year earlier, while mature markets will see a contraction of 1.2% in comparison to a drop of 8.7% last year. The research firm includes U.S., Western Europe, Japan, and Canada among mature markets.

Windows 8 is scheduled to ship commercially by end October.

The softness in the PC market is already showing on the performance of top vendors.

Hewlett-Packard reported this week that revenue of its Personal Systems Group was down 10% from a year ago in the quarter ended July 31, as desktop units fell 6% and notebook units dropped 12%. The company was the top PC vendor by shipments in the second quarter.

Dell said its revenue dropped 8% in the quarter to Aug. 3, as desktop and mobility revenue contracted. Revenue from desktop PCs dropped 9%, while from mobility products it dropped 19% in the quarter. Lenovo, the second largest PC vendor, had high growth in its PC business, mainly on account of its dominance of the Chinese market.

Uncertainty about product upgrades are largely likely to be resolved by the end of the year, with a modest improvement on the economic front also likely, but both consumers and businesses are expected to be cautious with spending and when deciding to replace older products, according to IDC.

IDC now expects worldwide PC shipment growth will average 7.1% from 2013 to 2016, down from the 8.4% compound annual growth rate (CAGR) it had previously forecast for 2012 to 2016.

John Ribeiro covers outsourcing and general technology breaking news from India for The IDG News Service. Follow John on Twitter at @Johnribeiro. John's e-mail address is john_ribeiro@idg.com