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Global PC Market has Modest Gains in 4Q 2010

The worldwide PC market continued to slow in the fourth quarter of 2010 (4Q10) due to a softening consumer market, competing products like media tablets, and strong year ago sales.

Despite a holiday season marked by a long promotion cycle and highly competitive price points, the global PC market saw shipments rise only a modest 2.7 percent year on year during 4Q10, according to the latest market study by International Data Corporation (IDC).

Fourth quarter growth was slightly less than a projected increase of 5.5 percent, but shipments of 92.1 million for the quarter still were the largest ever. Total shipments for 2010 reached 346.2 million, an increase of 13.6 percent that was fueled by a strong recovery in the first half of the year.

Softening demand in Asia-Pacific (excluding Japan) contributed to the slow market with shipment growth falling into single-digits following a recent peak of more than 30 percent a year ago.

Other regions were generally in line with expectations. The United States market declined 4.8 percent year on year, while other regions continued to experience market expansion, although at a slower pace than in recent quarters.

"The U.S. market was expected to shrink year over year given the exploding growth experienced in the fourth quarter of 2009. Growth steadily slowed throughout 2010 as weakening demand and competition from the Apple iPad constrained PC shipments," said David Daoud, research director, at IDC.

In addition to relatively high market penetration and a good-enough computing experience with existing PCs, consumers are being more cautious with their purchases and competing devices have been vying for attention. This situation is likely to persist in 2011, as a wave of new media tablets could reduce demand in the traditional PC market.

"Consumer fatigue is playing an important role in many markets as the mini notebook surge wanes and consumers watch their spending and evaluate other products," said Jay Chou, research analyst, at IDC.

Softening demand in the Asia-Pacific region and the potential for similar changes in other regions represent the biggest potential shift in PC growth during 2011. These factors are likely to slightly reduce growth from previous IDC projections of about 10 percent for 2011 -- although replacements in the commercial segment and aggressive competition should still support double-digit growth in the second half of the year.

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