Netbooks Brighten PC Sales Outlook

Worldwide PC shipments didn’t fall as sharply as expected in Q1 –
dropping just 6.8 percent – 1.4 percent better than previously forecast.

But the decline still marked the sharpest decrease since Q3 of 2001,
according to market research firm IDC’s Worldwide Quarterly PC Tracker.

IDC notes that positive activity at the end of the quarter helped
improve the actual results over what had been forecast. However, the
firm says, key economic indicators and the commercial sector have
remained weak.

Netbook shipments pushed PC sales higher, contributing 5.7 million to
unit volume in Q1. However, traditional notebook shipment unit volume
declined by 3.1 million over the same period a year ago. The switch
pushed revenue down, with mini notebooks contributing $2.2 billion in
Q1 while the value of traditional notebook shipments declined by $8.4
billion compared to the same period last year.

“The economic crisis continues to dampen PC demand and force changes in
the market,” says Loren Loverde, director of IDC’s Worldwide Quarterly
PC Tracker, in a prepared statement “Mature regions are navigating the
changes better than emerging regions in the short-term as finances
remain more liquid, but from 2010 forward emerging regions will have
the advantage in both growth and volume. Meanwhile, the concentration
of growth in the consumer segment and in evolving categories like mini
notebooks is quickly raising the stakes of competition.”

IDC says it expects netbook pricing to rise as more “robust” models
become available, and shipment growth will slow with the release of
thin-and-light Intel CULV and AMD Cogno-based systems this fall.

While growth in mature markets has dropped significantly over the past
two quarter, IDC says it expects these markets to stabilize and improve
going forward. Consumer demand, supported by declines in average
selling prices (ASPs) and gained strength from growth in netbooks.

IDC is now forecasting that shipments in the United States are still
expected to decline by just over 2 percent for 2009 and see less than 1
percent growth in 2010.

Emerging markets saw dramatic shipment declines as lack of credit and
currency devaluation continued to shrink resources for channel
financing, according to IDC.

The picture in Asia/Pacific proved to be a little brighter, however, as
shipments came in slightly above forecast, driven by government
spending on infrastructure improvements and vouchers issued to
stimulate consumer spending. IDC forecasts PC growth for the rest of
2009, reaching close to 12 percent for 2010

"Despite a relatively slow first quarter, industry supply chain checks
suggest that the worst is over and we are starting to be more
optimistic about volume growth at the end of the year and especially
into 2010," says Bob O’Donnell, IDC’s vice president, Clients and
Displays, in a prepared statement. "New product introductions coming
this fall, including low-cost, thin-and-light consumer portables,
low-cost Intel Atom-based all-in-ones, and, of course, Windows 7,
should provide a spark that helps to push market towards positive
shipment growth over the next 12 months."