PC market faces “real test of resilience”

Sales are improving, but doubts still remain over strength of recovery

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PC market faces “real test of resilience” The global PC market will enjoy double-digit expansion this year, but analysts say the economic performance of the mature markets may slow the rate of growth down.
By  Andrew Seymour Published  August 31, 2010

The worldwide PC market faces a "real test of its resilience" during the second half of the year, due largely to fears over how strongly the mature economies are recovering from the global recession.

Although worldwide PC shipments are projected to increase to nearly 368 million units this year, research house Gartner has cut its forecast by two percentage points in light of the uncertain economic outlook for the US and Western Europe. 

It now believes the market will expand 15% year-on-year.

"There is no doubt that consumer, if not business PC demand has slowed relative to expectations in mature markets," said Ranjit Atwal, research director at Gartner.

"Recent dramatic shifts in the PC supply chain were in no small part a reaction to fears of a sharp slowdown in mature-market demand. However, suppliers' risk-aversion is as much a factor in these shifts as any actual downshift in demand," he added.

Gartner insists the slow pace of economic recovery and austerity measures in Europe have made PC suppliers very cautious this year. However, it predicts that consumer demand will remain strong even if the economic recovery stalls because consumers now view the PC as a relative 'necessity'.

It is also confident that wide-scale PC refreshes from commercial customers "can't be more than a few quarters ahead."

Atwal says businesses will find it very difficult to delay PC replacements further because the age of the professional PC installed base is already at an all-time high.

"Businesses that delay replacing much longer risk alienating employees, burdening themselves with more service requests and support costs, and ultimately facing higher migration costs when they eventually migrate to Windows 7," said Atwal. "The bottom line is that businesses need to refresh their PCs sooner rather than later. Thus, the full bloom of the long-awaited professional PC refresh can't be more than a few quarters ahead."

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