Poor consumer demand to drag down PC market in 2011
IDC cuts forecast for 2011 worldwide PC shipments due to weak consumer demand
IDC has adjusted its estimates for shipment growth in the worldwide PC market, citing weaker consumer demand as the lead among a range of factors that are dampening demand.
The analyst company has amended its prediction, according to its Worldwide Quarterly PC Tracker, to just 4.2% growth in 2011, down from its February forecast of 7.1%. IDC said that declining first quarter shipments, an increasingly conservative economic outlook, relative saturation among developed market consumers, and competing products such as tablet PC are depressing the market. The company does expect to see the market return to positive growth in 2012, but the sector will remain in low double-digit growth - 10% to 11% through to at least 2015.
The decline of the consumer sector is having a significant effect on the PC market as a whole, because of consumer shipments have been a cornerstone of growth over the past five years, according to IDC. The consumer segment, particularly low-cost portable PC s in both mature and emerging markets, and buying of portables as secondary systems, saw consumer shipment growth average 18.9% from 2005 to 2007, almost 7% faster than commercial shipments, growing to 21% during 2008 and 2009. This was despite the recession, which saw the commercial sector hi -10.5% during 2009.
Growth in consumer sectors in 2009 was mainly driven by the boom in netbook sales, which accounted for 80% of volume growth in mature markets in 2009, with emerging markets seeing approximately one half of all portable PC shipments made up by netbooks during the same year.
The netbook segment has fallen back however, due to market saturation, consumer recognition of the limits of cheaper, small form factor models, and better competition from mainstream portables and the tablet sector. IDC's Worldwide Quarterly PC Tracker includes desktop, netbooks and other portable PCs (notebooks), but not include handhelds or tablets.
"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."
The consumer segment is likely to remain depressed during the second half of 2011, IDC predicts, as the ongoing effects of recession are putting more pressure on consumer discretionary spending, and improvements such thinner designs, longer battery life, instant on and touch screens are not likely to be widely available, and thus appeal to consumers, until 2012.
Consumer shipments were down 4.4% year-on-year in Q1, only partially offset by commercial shipment growth of 3%, with Western Europe and North America all showing double-digit declines. Other disruptions, including the Japan earthquake and nuclear disaster, the Arab Spring, and reduced economic projections and cut backs in government stimulus spending will see the segment down for the rest of the year, IDC predicts.
Past 2011, IDC believes that technological innovations, such as new designs, chips, operating systems, features, and services, and falling prices will make PCs more desirable, while replacement in mature markets, and adoption by new users in emerging markets will see the return of double-digit growth.
Smartphones and tablets will continue to take from PC market share, but the larger PC user base and ecosystem will see it maintain dominance.
"The PC market has definitely hit a slow patch," said Loren Loverde, vice president, Worldwide Consumer Device Trackers. "Nevertheless, the long-term growth drivers - first among which are growth in emerging markets, declining prices, and growing functionality - remain intact, and the product and design innovations underway will keep PC growth healthy in the long term."