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Why the Global PC Market Outlook Remains Dim

The worldwide personal computer (PC) market is forecast to grow at 5 percent year-over-year in 2012. According to the latest market study by International Data Corporation (IDC), nearly 383 million PCs will ship into the market this year.

That's a slight improvement over the tepid growth seen in 2011 -- as PC sales continue to falter amidst intensifying competition from alternative devices and a highly volatile global economy.

In addition to rising consumer saturation in mature regions, economic uncertainty -- as well as the anticipated launch of Microsoft Windows 8 -- and growth of competing media tablet devices are the key factors affecting the market outlook.

With the threat of a relapse into recession in several markets adversely affecting public spending and business confidence, the 2012 forecast for several key segments has been reduced -- especially among small and medium-sized firms.

IDC believes that Windows 8 could help to reinvigorate a consumer market that has lost a degree of enthusiasm in recent years. But then again, given Microsoft's ambiguity, many open-ended questions remain -- such as the release date, meaningful information about functional capabilities, and pricing -- that will likely limit demand for the new operating system (OS).

Consumer PC shipments are expected to see modest growth in 2012 with the revamp of a sleeker Wintel platform fueling additional growth in 2013 through 2016. IDC expects the forecast period to culminate with total PC shipments topping 528 million units in 2016.


"Consumer sentiment could be revived with UltraBook or Ultrathin systems -- provided the right price is reached. More price-cutting in the Android tablet landscape could free up some budget for PC purchases, but could also focus consumers on media tablets rather than PCs," said Jay Chou, senior research analyst with IDC.

IDC continues to have a conservative view toward PC purchases in mature markets, which are generally expected to return to growth mode in 2012 after a contraction in 2011. Meanwhile, headwinds from the Euro crisis are increasingly being felt in the emerging markets, the previous stalwarts of growth.

The outlook for emerging markets has become more mixed with Central Europe, Middle East and Africa (CEMA) increasing its outlook while Asia/Pacific (excluding Japan) and Latin America will experience slower growth in the short term.

From my perspective, I'm not at all encouraged by the upside potential for Intel UltraBook or AMD Ultrathin branded notebook PCs. Both are handicapped by the legacy of Microsoft OS known limitations.

Moreover, given the content of the current marketing campaigns for both brands, I predict that it will continue to be difficult to convince prospective buyers that these notebook PCs are a good value.

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