Desktop spending fuels PC market recovery


10 Jun 2004

Share on FacebookTweet about this on TwitterShare on LinkedInShare on Google+Pin on PinterestShare on RedditEmail this to someone

Share on FacebookTweet about this on TwitterShare on LinkedInShare on Google+Pin on PinterestShare on RedditEmail this to someone

A return to form of spending trends in the desktop PC market is fueling a widespread market recovery, claims IDC. According to the research firm’s quarterly PC Tracker, worldwide PC shipments are projected to grow by 13.5pc in 2004, boosting market size to over 175m units.

IDC says that rising unit growth and an incremental shift toward higher cost configurations are expected to lift shipment value to $194.5bn during 2004 on growth of 9.2pc. Higher growth expectations for 2004 have had relatively little impact on growth rates for 2005 and subsequent years with shipments expected to grow by nearly 11pc in 2005 and roughly 8pc from 2006 to 2008. Growth in shipment value is expected to hover in the 3 – 5pc range during the remainder of the forecast.

Worldwide shipments of desktop PCs grew by 13.4pc year on year in the first quarter of 2004, up from 9.6pc in the fourth quarter of 2003, while portable PC growth slowed to 28.5pc in the first quarter from more than 35pc in the second half of 2003. The strong growth in desktops, which continue to represent more than 70pc of worldwide PC shipments, helped boost growth expectations for total PC shipments in 2004 by 2.1pc to 13.5pc.

In the US, improving business and persistent consumer demand should sustain shipment growth in double digits during the next two years. Although, IDC warns, rising interest rates and consumer debt may limit overall growth, replacement demand and low-cost systems should continue to drive the market.

In Western Europe, however, the rebound in commercial spending and long-awaited refresh cycles should boost shipment growth to nearly 15pc in 2004. Continuing growth in portable PCs, particularly in the consumer segment, will remain a key market driver.

PC shipment growth in the Asia Pacific region is predicted at 16pc in 2004. However, the Japanese market remains constrained by a tough economic environment and already high portable PC adoption. Overall growth projections for 2004 remain at just over 6pc, up from less than 3pc growth in 2003.

“While there is little doubt that wireless capabilities, falling prices, and the growing need for mobility have increased demand for notebooks, many buyers remain price sensitive and continue to evaluate the benefits of mobile computing,” said Loren Loverde, director of IDC’s Worldwide Quarterly PC Tracker. “Portable PCs continue to grow much faster than desktops, but recent results demonstrate the continuing competitiveness of desktop systems.”

“Although the refresh cycle this time around is not as distinct as the one that preceded the Millennium, we are clearly going through a period of elevated demand that could be likened to a sea swell (as opposed to a wave breaking on shore),” added Roger Kay, vice president of client computing at IDC. “The rise is noticeable, but not overwhelming, and will last for a number of quarters. We can expect at least another year of this level of activity as companies update their aging systems and mainstream consumers increasingly adopt PCs for digital entertainment.”

By John Kennedy