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Global Economic Pressures Weaken PC Shipments

Continued challenges across the global economy are impacting technology purchases. Worldwide personal computer (PC) shipments increased 2.6 percent in the second quarter of 2011 (2Q11), according to the latest market study by International Data Corporation (IDC).

The results are just short of IDC's May projections for 2.9 percent growth and represent a combination of a hangover from the more than 20 percent growth in the first half of 2010 as well as competition from smartphones, other consumer products and pressure from lackluster economic conditions.

As in 1Q11, the United States and Western Europe were among the weaker regions, reflecting constrained demand and lower spending in more mature markets, while emerging regions -- particularly Latin America and Asia-Pacific (excluding Japan) -- fared much better overall.

"These preliminary results continue to reflect pressure from competing consumer and business products as well as cautious spending," said Jay Chou, senior research analyst with IDC. Nevertheless, product refreshes and promotions in the second half of the year should boost growth, according to IDC's latest assessment.

The U.S. PC market continued to contract in 2Q11, largely as a result of three factors.

The first is an ongoing contraction in the netbook market and related inventories. The second is the impact of 2Q10's difficult-to-sustain 12 percent growth rate. And third, demand has softened as corporate buyers continue to focus on increasing share of their IT budget in new IT solutions -- such as cloud and virtualization, and consumer interest shifts to media tablets.

Given the weakness of 2H10, IDC expects a better market environment in 2H11 with mid-single digit growth rates in the third quarter's back to school and fourth quarter's holiday season.

Regional Outlook for Personal Computer Shipments

United States -- With a decline of 4.2 percent year over year, the market was still downcast from a combination of exuberant consumption a year ago and a tenuous economic recovery, but the quarter also marked substantial growth from 1Q11, and total shipments topped over 17.8 million.

Europe, Middle East, Africa (EMEA) -- The EMEA PC market continued to contract in 2Q11, in line with IDC's forecast, as sustained high levels of inventory prevented stronger sell-in, particularly in Western Europe, where budget cannibalization from media tablets and smartphones continued to contribute to weak consumer demand and slow stock depletion. However, Central and Eastern Europe (CEE) and the Middle East and Africa (MEA) continued to expand and enjoyed positive growth overall.

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