PC market crash averted, says Gartner

Unit sales now expected to grow, though PC revenue still seen plunging by 11%

By Eric Lai, Computerworld, 11/23/09

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Reversing earlier doom-and-gloom forecasts, Gartner Inc. now projects that global PC shipments will grow 2.8% this year.

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Low-priced laptops, such as those in the emerging netbook category are helping boost unit sales to better than expected levels; Windows 7, though, isn't responsible for the upgraded projections, Gartner said today.

At the beginning of this year, Gartner had predicted that 2009 PC shipments would fall by 11.9% from last year. The decline would have been four times greater than that in 2001 after the dot-com bust.

This year, though, sales of mobile PCs, driven by consumer enthusiasm for inexpensive netbooks , beat forecasts during each quarter, forcing a shift in the initial projections. Mobile PC sales were especially strong in the third quarter during the back-to-school selling season.

Gartner is now projecting that mobile PC shipments will reach 162 million units this year, a 15.4% increase over 2008. Mini-notebooks, mostly comprised of netbooks, are expected to account for 29 million of that total.

Those mobile PC numbers easily offsets the 9% decline expected in desktop PC shipments this year. Gartner said it expects desktop PC sales to total 136.9 million, or 46% of the total PC market.

Despite the gain in unit sales, Gartner projected that overall PC revenues will likely to fall by 11% from 2008, due to plummeting average selling prices (ASPs). That revenue decline continues a trend started late last year when forth quarter 2008 revenues fell by about 20% year-over-year, said Gartner.

Despite Microsoft's recent proclamation that early sales of the new Windows 7 operating system are very strong, the OS won't provide much of a lift to the PC market this year, Gartner said.

"We just don't see consumers buying new PCs solely because of Windows 7," said Gartner analyst George Shiffler in a statement. "We are expecting a modest bump in fourth-quarter consumer demand as vendors promote new Windows 7-based PCs, but the attraction will be the new PCs, not Windows 7."

For more enterprise computing news, visit Computerworld. Story copyright Computerworld, Inc.

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