‘Other Priorities’ Send PC Market Tumbling

Thanks to further weakness seen in the United States and around the world, International Data Corp. (IDC) has lowered its forecasts for the worldwide consumer PC market, from -0.2 percent growth to an expected 9.6 percent decline in 2001.

According to IDC, falling consumer PC shipments in both the United States and Japan were a major factor in the adjustment. Far from bouncing back after a first quarter decline, U.S. consumer PC shipments were down 17 percent sequentially in the second quarter and down 21.8 percent year-on-year. In Japan, the consumer market was expected to slow from near 50 percent growth in 2000, but moved into negative territory in Q2 with a year-on-year decline of 10.2 percent.

IDC believes it’s unlikely the consumer PC market will improve much in the second half of 2001, even with the release of Windows XP.

“For most consumers, a new PC is a very large discretionary purchase,” said Roger Kay, director of Client Computing at IDC. “And that’s for new users. When it comes to replacing a system that probably meets a user’s basic needs, it’s an extremely tough sell in these economic times.”

Consumer PC shipments in the United States are expected to decline 25 percent in 2001, while internationally IDC projects flat consumer shipment growth for 2001, down from 39 percent growth in 2000.

The commercial PC market doesn’t get to escape the carnage. IDC predicts the U.S. commercial segment will contract by 5.2 percent in 2001, down from 6.1 percent growth in 2000. Worldwide, commercial PC shipment growth is projected to fall from 10.5 percent in 2000 to 3.2 percent in 2001.

“With a large base of fairly powerful computers installed and a relative lack of processor-hungry applications, many businesses are postponing PC upgrades and new purchases,” said Loren Loverde, director of IDC’s Worldwide Quarterly PC Tracker. “Both business and consumer buyers are simply finding other priorities right now.”

So when does all of this get better? According to IDC, the consumer market will begin to pick up outside the United States by mid to late 2002 as Windows XP gains momentum. Depending on the strength of the economy, IDC does expect the U.S. consumer market to pick up again — around 2003. Commercial shipments could see signs of life a little sooner. They are expected to pick up in all major regions by the end of 2002, as older systems are phased out and businesses look to upgrade their OS platform in greater numbers.


PC Shipments and Growth, 1999-2005
(millions)
1999 2000 2001 2002 2003 2004 2005
U.S. Units
Home 17.2 18.9 14.1 11.6 13.1 13.9 14.6
Commercial 27.9 29.5 28.0 28.8 32.4 35.7 36.9
Total 45.1 48.4 42.1 40.4 45.5 49.6 51.5
U.S. Growth
Home 9.4% -25.0% -17.8% 12.8% 6.1% 4.9%
Commercial 6.1% -5.2% 2.8% 12.6% 10.2% 3.5%
Total 7.3% -13.0% -4.1% 12.7% 9.0% 3.9%
Worldwide Units
Home 38.8 48.8 44.1 46.0 52.7 59.1 65.4
Commercial 75.0 82.9 85.5 92.6 104.1 116.0 125.8
Total 113.8 131.7 129.6 138.6 156.7 175.1 191.2
Worldwide Growth
Home 25.8% -9.6% 4.3% 14.4% 12.2% 10.6%
Commercial 10.5% 3.2% 8.3% 12.4% 11.4% 8.5%
Total 15.7% -1.6% 6.9% 13.1% 11.7% 9.2%
Source: IDC

Related reading

snapcash-100531166-large
mothersday
CZLJKT_LinkedIn_Chris Reed_Feature Image
How Schuh uses mobile to increase sales