Slowing consumer demand in recent years has sapped growth in global shipments of personal computers (PCs), whose long-term growth however, due to some positive signs ahead, is expected to be double digits, according to International Data Corporation's (IDC) latest report.
The Massachusetts-based provider of market intelligence and advisory services for the information technology, telecommunications (ITC) and consumer technology markets, said recently that worldwide PC shipments will grow by just 4.2% in 2011, down from a February forecast of 7.1%.
A combination of declining first-quarter shipments, an increasingly apprehensive economic outlook, relative saturation among developed markets, and competing products will slow growth in 2011 before a rebound in 2012, said IDC, with growth from 2012 through 2015 still predicted to be in the 10-11% range.
Consumer PC purchases have been a cornerstone of PC growth over the past five years, during which a transition to low-cost portables helped drive purchases by new users in emerging markets as well as replacement and secondary systems in more mature markets. According to IDC, consumer PC shipment growth averaged 18.9% from 2005 to 2007, almost 7% faster than commercial shipments. During 2008 and into 2009, consumer PC shipment growth was actually faster at more than 21% while commercial growth fell below 3% in 2008 and then dropped to -10.5% during 2009 due to the global financial recession.
The growth in 2009, which was remarkably independent of the economic pressures following the housing bubble, banking crisis, and related recession, IDC explained, was largely fueled by the mini notebook (or netbook) boom. Consumers in mature regions snapped up over 19 million mini notebooks in 2009 compared to just 6.6 million the prior year, and the jump accounted for over 80% of volume growth in the segment. Emerging regions also got a bump from mini notebooks, which added 7 million units in 2009, accounting for roughly half of growth in portable PCs.
Portable PC shipments are forecast to grow 13.9% in 2012, compared to 2.6% for desktop PCs in the same year.
However, the appeal of low prices for mini notebooks has given way to a number of factors, including relative saturation following this boom cycle, recognition of their limitations, and better competition from both mainstream notebooks and media tablets, which increased 31 million and 17.9 million units in 2010 respectively vs. just 1.3 million for mini notebooks.
"Consumers are recognizing the value of owning and using multiple intelligent devices and because they already own PCs, they're now adding smart phones, media tablets, and eReaders to their device collections," said Bob O'Donnell, vice president, Clients and Displays. "And this has shifted the technology share of wallet onto other connected devices."
Impacted by Recession
In addition, IDC said, consumers are also increasingly affected by the prolonged recession – affecting not just housing, employment, equity markets, and gross domestic product (GDP), but also rising energy and food prices, relatively high debt, and tight credit – much of which hits directly at consumer discretionary spending. The potential boost to the PC market from thinner designs, longer battery life, instant on, touch, and other improvements will likely not be widely available until 2012, and will have to address price-sensitive buyers in order to drive higher growths. In fact, the appeal of these future enhancements could be seen as another motive for consumers to delay purchases of new PCs until they are available and to focus on other products in the meantime, the company said.
Global PC shipments in the first quarter 2011 were down 1.1% from previous year, IDC said, with a decline of 4.4% in consumer shipments that was only partially offset by 3.0% growth in commercial segments. However, the decline in consumer shipments was particularly acute in mature regions, with double-digit declines in Western Europe, the U.S., and Canada.
Relatively strong growth in the second quarter of 2010 is likely to keep second quarter 2011 growth low. This trend in consumer growth, along with only modest growth in the commercial sector, a cautious outlook from PC makers, disruptions including the Japanese earthquake and nuclear disaster, the Arab Spring, and reduced economic projections (including government stimulus) will keep overall growth in single digits the rest of 2011.
Growth Beyond 2011
Nevertheless, IDC said it expects significant growth in both consumer and commercial markets to continue beyond 2011. New designs, chips, operating systems, features, and services, along with falling prices will continue to make PCs more powerful, affordable, and functional than ever before. Despite incursions by smartphones and media tablets, PCs have a large user base and ecosystem, and continue to represent the most comprehensive and affordable computing platform. Adoption by new users in emerging regions as well as replacements in more mature markets will continue to drive double-digit growth through the end of the forecast.
(by Quincy Liang)