PC markets looking up as analysts report growth

IDC and Gartner preliminary PC shipment figures for Q2 2003 suggest the worldwide market has returned to double-digit growth, but is a corporate recovery on the cards?

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By  Mark Sutton Published  July 21, 2003

The latest figures from Gartner show that PC markets may finally be regaining some impetus, as year on year growth reached double-digit figures for the first time since 2000. Shipment figures for the second quarter of this year showed a 10% growth from the previous year worldwide, up to 32.8 million units. While the Asia/Pacific region slipped, mainly due to problems over the SARS virus, other key markets pushed growth well into double digits, with the US and EMEA regions enjoying 11.1% and 12.8% growth respectively.

IDC’s preliminary figures were not quite as positive, with the US up to 8.1% growth and EMEA on 9.8%, but although IDC’s forecasts don’t show any market yet reaching double digits, the growth is still positive.

Both analyst houses tell the same story however about why the market is moving—aggressive pricing across all product sectors and growth in notebooks, with the strongest performance in the consumer segment. While both desktop and PC servers have benefited from more competitive pricing, it is the notebook sector that continues to lead shipment figures. On top of the already fierce competition in notebooks, the segment is also facing price cuts as vendors try and clear stock to make way for new Centrino-enabled notebook ranges.

The problem is that while consumer spending is good, spurred along by low prices, it may prove difficult to push those prices back up again in the long term. For a start, Intel and the notebook vendors have to convince users that it is worth paying extra for Centrino notebooks once they start shipping in large volumes. They also have to convince the home user of the value of high performance wireless thin and light notebooks as opposed to desktop replacements, which have traditionally led the notebook market in EMEA.

Secondly, corporate budgets are still under tight control, and while retail is clearly an important market, it is corporate spending that will really provide long-term recovery for PC markets. One interesting result which may provide a bell-wether indication of true recovery is IBM’s performance. Big Blue slipped in the previous quarter, but Q2 saw it regaining the number four slot for PC shipments in EMEA, with a strong performance in most markets. With IBM’s focus mainly on the corporate market, Gartner say this could indicate that business spending is on the rise, although IDC analysts are again more cautious, pointing out that IBM’s result was based against a weak performance in the corresponding quarter from 2002. Regardless, they both agree that a stronger IBM could mark a stronger corporate market coming up.

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