Decline Predicted for U.S. PC Market

International Data Corp. (IDC) has revised its U.S. PC shipment forecast for 2001, lowering it from the previously expected 2.2 percent growth to a 6.3 percent decline from 2000. Along with its U.S. forecast, IDC has also dropped its worldwide forecast number for the full year, from 10.3 percent to only 5.8 percent over 2000. The worldwide performance was strongly affected by a swooning U.S. market, according to IDC.

U.S. consumer PC sales for 2001 are now expected to fall by 17.3 percent, based on the presumption of a continuing poor economic environment.

“While we believe that the shape of the seasonal pattern will be normal, the year-end uplift will not be as buoyant as is typical at that time of year,” said Roger Kay, director of Client Computing at IDC. “Consumers have still not emerged from the shell they crawled into late last year.”

IDC’s final tally of consumer PC shipments in the United States for the first quarter of 2001 showed the market had declined by 26.4 percent from the first quarter of 2000. Up through the first quarter of 2001, commercial shipments in the United States held up reasonably well, achieving mid-single-digit growth rates. However, IDC believes commercial spending will be reduced more dramatically in the coming quarters, as declines in consumer spending spill over into the commercial segment. IDC projects shipments to the U.S. commercial segment will be flat in 2001 with growth of only 0.6 percent.

According to IDC’s forecast, while the United States is not clearly in recession (because some sectors, such as services, remain healthy), several manufacturing industries, notably automobiles, steel and computers, are experiencing clear retrenchment, and the related economic dislocation is likely to carry on into 2002. IDC now expects PC unit shipments in the United States to rise by only 4.6 percent in 2002 over 2001.

PC shipment growth is also expected to decline somewhat outside the United States. IDC’s most recent numbers show growth outside the United States of 12.9 percent for 2001, down from a previous forecast of 15.1 percent, bringing worldwide growth for the year down to 5.8 percent. Growth outside the United States is expected to rise to 16 percent in 2002, with worldwide growth of 12.2 percent.

Among the factors contributing to slower growth outside the United States are falling consumer spending in Western Europe and declining growth in Asian markets following two years of extremely high growth. The markets in Canada and Latin America will slow somewhat in the wake of a weaker U.S. economy, and poor conditions in Turkey continue to pull down growth in the Middle East. Offsetting these negative factors, the commercial market in Western Europe appears to have begun a slight recovery.

“With the United States clearly in the tank right now, the question is to what extent Europe and Asia will follow,” said Loren Loverde, director of IDC’s Worldwide Quarterly PC Tracker. “The commercial segment in Western Europe is showing some promise, but the consumer segment looks more shaky. The heavily export-dependent countries in Asia could also be vulnerable to the U.S. slowdown, although low penetration rates in many countries leaves room for double-digit growth for the foreseeable future.”

Worldwide PC Unit Shipments and Growth, 1999-2005
(Unit Shipments are in millions)
1999 2000 2001 2002 2003 2004 2005
United States 45.1 48.4 45.3 47.4 54.1 58.2 60.8
U.S. Growth 7.3% -6.3% 4.6% 14.2% 7.5% 4.5%
Worldwide 113.6 131.3 138.9 155.9 178.1 197.2 215.5
Worldwide Growth 15.6% 5.8% 12.2% 14.3% 10.7% 9.3%
Source: IDC

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