Analysts slash 2009 PC growth forecast by two-thirds

The turbulent economy forces iSuppli to lower chip, PC forecasts

One analyst firm has slashed its 2009 growth forecast for PC shipments by nearly two-thirds because of the deteriorating economy.

ISuppli Corp. reported Thursday that it is now predicting that worldwide PC shipments will rise by 4.3% in 2009, down from its previous forecast of 11.9% growth. The firm also adjusted its expectations for 2010, dropping its initial prediction of 9.4% growth to 7.1%.

"Since iSuppli published its last worldwide PC forecast, the landscape of the global economy has changed dramatically, and in many ways irrevocably," said Matthew Wilkins, an analyst at iSuppli, in a statement.

"The result of the financial turmoil is less money to spend," Wilkins said. "With less money to spend, application markets, like PCs, have been impacted."

He noted that for 2009, consumers and businesses will be more focused on paying mortgages or their staffs' wages than investing in new hardware. The one anomaly in that scenario, though, is the slew of new netbooks hitting the market.

ISuppli noted that while desktop shipments are expected to drop by about 5%, laptop shipments will grow by 15%. And much of that growth is being attributed to the increasing interest in low-power, low-priced netbooks. Mini-laptops, increasingly known as netbooks, are relatively inexpensive, small-form-factor laptops designed for basic applications, such as Web surfing, e-mailing and word processing. They're designed to use less power than traditional PCs and laptops and aren't robust enough for serious power users or gamers.

ISuppli's adjustment to its PC forecast came just one day after the firm downgraded its estimates for global semiconductor revenue for this year.

On Wednesday, iSuppli projected that 2008 semiconductor sales will decline by 2% to $266.6 billion, from about $272 billion in 2007. Just last month, iSuppli had predicted that 2008 semiconductor sales would grow by 3.5% over last year's. Analysts also predicted that the negative momentum will continue into the fourth quarter of this year, with the overall market expected to drop by 10.9% compared with the same quarter last year.

Not every market has dropped, though. Earlier this month, market research firm IDC reported that the worldwide microprocessor market hit a new shipment record in the third quarter, largely boosted by Intel Corp.'s new Atom processor. The chips, designed for the increasingly popular netbook computers, boosted the market despite the turbulent economic times, growing by 8.3% from the second quarter to the third.

Copyright © 2008 IDG Communications, Inc.

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