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Will the Ultrabook Correct the PC Market Downturn?

According to the latest market study by International Data Corporation (IDC), worldwide personal computer (PC) shipment growth for 2011 ended on a slightly positive note -- growing to 1.8 percent on the year.

While the first half of 2012 is expected to see only modest shipment growth, the launch of Windows 8 and the upside potential from new ultrabooks and other ultra-thin notebooks should drive second half sales in a much stronger way. Meaning, that's the hopeful outlook, at this time.

For much of 2011, vendors struggled to maintain consumer interest in a market beset by a tenuous economic recovery and disrupted by emerging consumer electronics devices. The lack of interest was evidenced by a lackluster Christmas holiday season.

Just how bad did was the global market downturn? Mature markets such as the United States and Western Europe, in particular, had a rough year -- with PC shipments in 2011 shrinking by 9 percent compared to 2010.

Looking ahead, the PC market will still experience some isolated pockets of growth, particularly in emerging markets. IDC expects 2012 PC growth to be modest at just 5.0 percent for the year, with most of that growth occurring in the latter half of the year.

"Many consumers are holding off making PC purchases at the moment because tablet devices like Apple's iPad are proving to be a powerful distraction," according to Bob O'Donnell, vice president of Clients and Displays at IDC.

However, end user surveys tell IDC that few people consider media tablets as replacements for their PCs, so later this year when there is a new Microsoft operating system, available in sleek new PC form factors, perhaps consumer interest in PCs will begin to rebound. Again, that's the optimistic view.

Although emerging markets have continued to show good uptake, IDC has slightly reduced its outlook in some regions. The 2012 forecast for China has been lowered to 9 percent, the first time single-digit growth has been forecast for a year.

Part of the adjustment among emerging markets comes from the shortage of disk drives, which greatly impacts white box PC manufacturers who play a prevalent role in these markets. Secondly, the prospect of slowing exports will also likely affect PC spending as both consumers and SMBs in developing countries scale back.

According to IDC's assessment, 2012 and 2013 will bring significant challenges for Microsoft and the PC community. The Wintel platform must evolve to accommodate user expectations of ubiquitous computing on a multitude of devices and physical settings.

Windows 8 and ultrabooks are a definitive step in the right direction, but its promise of meshing a tablet experience in a PC body will likely entail a period of trial and error, thus the market will likely see modest growth in the near term. Moreover, it's not clear if these ultrabooks will follow the Windows tradition of long slow boot-up times.

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