Technology | Media | Telecommunications

Thursday, July 10, 2008

Demand for Notebook PCs Drive UK Growth

The United Kingdom PC market demonstrated solid performance in 1Q08, as overall PC shipments for the quarter reached more than 3.25 million units, an increase of 14.3 percent year on year, according to IDC's latest assessment.

Mobility continued to be the key driver, as the notebook market grew by a very healthy 41.8 percent, thanks to renewals, further expansion of the installed base to new buyers, and multiple-equipment purchases.

Due to the rising popularity of portable PCs, desktop sales continued to decline, particularly in the consumer and Small and Medium-sized Business (SMB) segments, as many users chose to replace their existing desktop systems with notebooks.

"Demand for notebooks, stimulated by fierce vendor competition and aggressive pricing, will remain a key engine for growth throughout the year," said Lucie Jichova, research analyst for IDC's EMEA PC research group.

"Economic pressure will continue to drive cautious spending behavior, but the arrival of low-cost ultra-portables, increasing traction of telco bundles, and mobile solutions in the business space, will maintain strong momentum in the notebook market in the second half of the year."

According to IDC's latest forecast, notebook shipment levels are set to show growth levels of 35.5 percent this year, while desktop volumes are expected to sink further, with an annual decline of -8.3 percent.

"Demand levels for desktops in the SMB and consumer segments remain lackluster. In order to maintain sales volumes of consumer desktops, PC manufacturers will increasingly focus on home entertainment solutions and gaming machines," said Jichova.

Consumers are going to benefit from attractive notebook offers as competition among vendors in the retail channel intensifies. Furthermore, the rising availability of deals that bundle Internet subscription with free notebooks will create further pressure on other channels to bring prices down.

In the UK, consumers tend to focus on PC cost rather than specifications. Recently the introduction of affordable ultra-portable PCs have been very well received by consumers. IDC expects these basic surfing devices will continue to sell extremely well throughout the rest of 2008.