PC industry could weather financial storm


21 Sep 2007

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Despite ongoing consolidation and concerns about the global economy, worldwide PC shipments are on track to grow 12pc in 2007 and by 11pc in 2008, leading analyst Gartner predicts.

“We expect growth to run a bit stronger during the rest of 2007 as mobile PCs maintain their momentum and strong emerging market growth supports desk-based PCs,” said George Shiffler, research director for Gartner’s Client Platforms Markets Group.

“However, we think the climate of uncertainty created by recent events in global financial markets casts some downside risk on our forecast,” he added.

“The market will slow a bit, relative to our previous forecast, early next year as desk-based PC growth suffers payback for the strong growth it posted in the first half of 2007,” Shiffler continued.

“But the market should come back in line with our previous expectations later in the year as desk-based PCs experience stronger growth with the onset of a new replacement cycle.”

Mobile PCs remain the PC market’s principal growth driver due to falling prices, enhanced performance and the continuing spread of wireless access.

“Given the inherent potential for mobile PC growth in mature consumer markets and emerging markets, mobile PCs continue to offer vendors their very best growth opportunities provided they go to market with compelling products, competitive pricing, and in emerging markets, business models adapted to local conditions,” explained Mikako Kitagawa, principal analyst for Gartner’s Client Computing Markets Group.

Emerging markets are supporting overall growth, says Gartner, accounting for 70pc of the growth from the first half of 2006 through the first half of 2007 even though this segment accounted for just 42pc of shipments in the first half of 2007.

Analysts expect mature markets to average just 7pc unit growth this year and next. In contrast, emerging markets will average 18.6pc unit growth during this time.

“Individual emerging markets vary considerably in terms of culture, business environment, commercial practices and political economy,” said Kitagawa.

“Success in emerging markets requires attention and adaptation to local circumstances. Given the relatively lower average levels of income that typify emerging markets, success also requires an appreciation for price-conscious buyers and stringent cost discipline,” she added.

Recent volatility in global financial markets has aroused concerns that the global economy is about to experience a financial crisis and follow-on slowdown, punctuated by a recession in the States.

Gartner analysts say that unfolding events in the global financial markets certainly bear watching in the months ahead, but they said the possibility of such a scenario still appears remote. The global economy looks to have sufficient buoyancy to ride out the current financial storm.

“Based on this, the ongoing global economic turbulence will most likely have little effect on PC shipments in the months to come,” Shiffler said.

“However, since the situation remains fluid and circumstances could change, we recommend that PC vendors examine their supply chain flexibility and take whatever steps are necessary to maximise their flexibility in the face of greater economic uncertainty,” he concluded.

By John Kennedy