Portable PCs – not desktops – drive industry back to black

16 Mar 2010

The global PC market has slipped from the red back to the black due to improving economic conditions with portable computers – not desktops – leading the charge. However, it will be 2012 before the industry returns to 2008 levels.

After a severely constrained first half, steeply discounted PCs, along with improving economic conditions, steered the global PC market back into the black in the latter half of 2009.

According to the International Data Corporation (IDC), the yearly growth rate for the worldwide PC market in 2009 was 2.9pc.

Portable PC shipments increase

Portable PCs remained the key market driver, with shipments increasing 18.4pc in 2009 compared to 2008. Consumer purchases of portable PCs were the sole driver of the market, growing at 38.5pc.

Commercial shipments were severely strained but showed signs of life near the end of the year as fourth-quarter growth came in just under 1pc, providing a glimpse of an anticipated commercial refresh in 2010.

As a harbinger that the pace of ASP (average selling price) declines will moderate, netbook growth slowed in the fourth quarter as the volume of other notebook categories grew 22pc year over year.

With the recovery picking up, the PC market is expected to resume expansion in 2010 with global growth of 12.6pc.

Emerging regions, which have been instrumental in reviving the market, are expected to maintain course; growing 18.5pc in 2010 and overtake mature markets in volume during 2010 and beyond. Mature markets should see 2010 come in at 7.2pc, with double-digit volume growth resuming in 2011.

Portable PCs will remain the driver of growth across consumer and commercial segments, reaching a 70pc share of PCs by 2012.

Desktop PC decline

In the meantime, desktop PCs will see a decline across all regions except Asia/Pacific (excluding Japan), resulting in slightly positive yearly growth throughout the forecast period.

Set against the backdrop of a positive shipment outlook, market revenue will recover at a slower pace.

The year 2010 should see revenue growth; albeit at 5pc and nearly 7pc in 2011. However, compared against the record revenues seen in 2008, PC market revenue is not expected to surpass the 2008 number until 2012; and will need a shipment total of 140 million units higher than the 2008 market.

“PC volume continued to grow in 2009 – faring much better than in 2001, when a smaller recession produced a decline in PC volume,” said Jay Chou, research analyst with IDC’s Worldwide Quarterly PC Tracker.

“The positive 2009 results reflect lower prices and the fact that PCs are increasingly a must-have product.

“With lean margins and further market consolidation remaining a harsh reality for the foreseeable future, vendors are increasingly looking to a mix of volume and specialised products to grow revenue, including new combinations of portability, performance and the intriguing possibilities of touch computing.

“Overcoming challenges, such as synchronising data across multiple devices, will be an important step in enabling adoption of more devices and expanding market growth,” Chou added.

The company said that the new tablet computer device from Apple, the iPad, which saw frenzied pre-orders take place last week, won’t make any difference to the substantial growth that’s returning to the PC market.

“IDC is keenly focused on the forthcoming tablet device market,” said Bob O’Donnell, IDC vice-president, Clients and Displays.

“However, we don’t expect these products – which do not meet the current IDC definition of a PC – will stunt the strong growth in PCs we’re expecting to see this year.”

By John Kennedy

Photo: Portable PCs are expected to remain the driver of growth across consumer and commercial segments, reaching a 70pc share of PCs by 2012

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years