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Volatility in Overall PC Market Creates Uncertainty

Personal Computer (PC) shipments totaled 92.7 million in the fourth quarter of 2011 (4Q11), down 0.2 percent compared to the same quarter in 2010, according to the International Data Corporation (IDC).

Shortages of hard disk drives (HDDs) added to challenges from slow economic conditions and competition from other consumer electronics -- including media tablets, eReaders and smartphones.

The 4Q11 results reflected a year-on-year decline of 0.2 percent for the quarter and growth of 1.6 percent for the full year. This was in-line with IDC projections of a 0.6 percent decline for the fourth quarter and 1.5 percent growth for all of 2011.

Despite the overall market volatility, most regions slightly exceeded forecast. Most Tier 1 PC vendors had access to sufficient HDD supply, though smaller PC vendors and retail channels experienced drive shortages.

"Europe and Asia-Pacfic came in a little stronger than expected, reflecting improvement in key markets and the strength of underlying demand in emerging regions," said Loren Loverde, vice president, Worldwide Consumer Device Trackers at IDC.

PC Market Outlook Contains Some Uncertainty

In the United States, market saturation and the economic environment continue to weigh considerably on consumer demand. However, the market is awaiting new products and technologies. That said, what happens if the promise of Ultrabook PCs doesn't materialize in significant new demand?

IDC expects the market to slow further in the first quarter of 2012 as the full impact of the HDD shortage is felt, and hopefully recover to greater than 15 percent growth in the fourth quarter.

Annual 2012 shipments are currently projected at 371 million, an increase of 5.4 percent, followed by growth in high teens during the first half of 2013 and annual growth over 11 percent.

Let's not forget, the U.S. market had its second worst year in history in 2011, dropping nearly 5 percent from 2010.

Although not as severe as the 11.7 percent contraction following the Y2K buildup and subsequent tech crisis of 2001, 2011 was particularly affected by HDD supply constraints, very weak demand, and a difficult competitive landscape. The fourth quarter's HDD supply shortage has had a notable effect on fourth quarter shipments. It's not clear what the ongoing impact may be for the PC market.

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