Technology | Media | Telecommunications

Wednesday, April 27, 2011

Why Global PC Shipments Will Continue to Decline

Several factors contributed to the latest contraction in the worldwide PC market. Global PC shipments declined 3.2 percent during the first quarter of 2011 -- compared to the same time last year, according to the latest market study by International Data Corporation (IDC).

In contrast, IDC expected a mere 1.5 percent growth in shipments. Clearly, a spike in fuel and commodity prices and the disruptions in Japan added to the industry problems, further dampening a market struggling to maintain momentum.

The PC market showed clear indications that frugality, combined with a shift of focus, will be the norm for the time being. Mature regions are more focused on necessary replacements, as few compelling reasons were present to buy secondary PCs.

Emerging markets fared better due to lower saturation rates, but also slowed somewhat with Asia-Pacific (excluding Japan) slowing to a 5.6 percent growth and China continues to slow after experiencing high growth in 2010.

"While the consequences of events in the Middle East and Japan remain unclear, these will surely be factors that will influence short term market performance for 2011," said Jay Chou, senior research analyst with IDC.

Good-enough computing has become a reality, driving sales of Mini Notebooks and now Media Tablets. Macroeconomic forces can explain some of the PC business transition, but PC vendors must now deliver a compelling user experience that will justify new spending.

The U.S. and worldwide PC market continues to work through a difficult period that is expected to continue into the next quarter, but may start to improve in the second half of the year, according to IDC's assessment.

Slower than expected commercial growth in the first quarter failed to offset the ongoing challenges in the consumer market. While some of the decline may be due demand for media tablets, extended PC lifetimes and the lack of compelling new PC experiences played equally significant roles.