PC Shipments Up, Revenue Down In 2009 - InformationWeek

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Infrastructure // PC & Servers

PC Shipments Up, Revenue Down In 2009

Gartner had predicted a 2% decline in PC shipments, but instead reports a 2.8% increase from 2008.

Global PC shipments are projected to rise this year, driven by sales of mobile computers, a research firm says. But consumers' preference for inexpensive systems in the economic recession pushed industry revenue way down.

PC manufacturers will ship 298.9 million units this year, a 2.8% increase from 2008, Gartner reported. Revenue, however, will fall 10.7% to $217 billion. Gartner in September had predicted a 2% decline in annual PC shipments.

As the global economy recovers, PC sales are expected to rise next year. Gartner predicts shipments will rise 12.6% over this year to 336.6 million units, and revenue to increase 2.6% to $222.9 billion.

"Blame this year's drop in market value on the unprecedented declines in PC average selling prices we've seen this year," Gartner researcher George Shiffler said in a statement Monday. "The rapid decline in PC ASPs reflects a marked shift towards lower price points as customers have looked for good enough PCs at the cheapest price, and vendors have tried to spur market growth by catering to ever-lower price points."

The decline in average PC selling prices is expected to slow next year as the market recovers, but consumer preference for low-priced PCs in the form of laptops and netbooks is not expected to change. Therefore, the value of PC shipments will significantly lag shipment growth next year and beyond, Gartner said.

Microsoft's Windows 7, which shipped to consumers in late October, will have only a limited impact on holiday PC sales. "We just don't see consumers buying new PCs solely because of Windows 7," Shiffler said.

The more critical question is when will businesses decide the economy has sufficiently recovered to warrant replacing aging machines with new Windows 7 systems.

"We don't see businesses mainstreaming Windows 7 much before the end of 2010," Shiffler said. "We think many businesses will try to shift replacements to the back end of next year so as to sync their adoption of Windows 7 with their PC refresh. That will put a damper on early 2010 shipments."

Gartner's latest forecast has mobile PC shipments this year rising 15.4% over last year to 162 million units. In 2010, laptop shipments will rise to 196.4 million units. Desktop shipments, meanwhile, will fall 9% year-to-year to 136.9 million units. Next year, desktop sales are expected to increase to 140.2 million units.

Mini-laptops called netbooks are expected to continue giving a significant boost to overall mobile PC shipments next year. However, the low-performing systems that have been a major contributor to PC shipment growth this year are expected to face increasing competition from low-cost, full-size mobile PCs. As a result shipments of the mini systems are expected to noticeably slow as early as next year, Gartner said.

Gartner and rival IDC in October reported that global PC shipments bounced back in the third quarter following a decline in the first half of the year. The increase marked a turnaround in the market.

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