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The PC market is now expected to post positive unit growth in the fourth
quarter of 2009 in a long-awaited turnaround from what have been several
quarters of decline. And that will lead to a “healthy market recovery in 2010.”

Market research firm Gartner is now forecasting PC unit sales for 2009 to
decline by 6 percent to 274 million, a brighter forecast than Gartner released
earlier this year.  And the picture for 2010 will be even better, with PC
unit sales forecast to grow by 10.3 percent.

"PC unit growth was stronger than we expected in all markets but Eastern
Europe in the first quarter of 2009. In particular, consumer
shipments were much stronger than we anticipated," says George Shiffler,
research director at Gartner, in a prepared statement.

"However, professional shipments continued to struggle, and we think much
of the growth in consumer units was due to vendors and the channel restocking
inventories rather than an upsurge in demand. We expect units to contract
roughly 10 percent year over year in both second and third quarter 2009 before
they post positive growth in the fourth quarter."

Netbook, or mininotebook, sales continued “cushion the market’s decline” in Q1
2009, with unit sales on track to reach 21 million this year and 30 million
next year.

"However, mininotebook units posted their first quarter-over-quarter
decline in the first quarter of 2009," Shiffler says. "While this was
in part the result of the general contraction in PC shipments to the EMEA
region, it also reflects increasing competition between mininotebooks and
low-end mainstream mobile PCs as the former evolve toward larger screen sizes,
and the latter continue to drop in price. In effect, mininotebooks are becoming
just another value-based mobile PC offering."

Gartner forecasts mobile PC units to total 149 million units in 2009, a 4.1
percent increase over 2008, but spending on mobile PCs is expected to decline
12.8 percent as average selling prices (ASP) continue to drop at an
unprecedented rate. That drop is driven in part by the growth of less expensive
netbooks, but also by “performance-for-price” improvements in low-end
mainstream laptops.

Desktop PC units are now expected to total 125 million, a 15.7 percent decline
compared with 2008, according to Gartner, and spending is expected to decline
26.6 percent.

"Both mobile PC and desk-based PC units are being held back by users
extending PC lifetimes and delaying replacements in response to the ongoing
economic slowdown," Shiffler says. "The good news for the industry is
that delayed replacements won’t be lost replacements. Our research indicates
replacements should grow strongly in 2010 and 2011, helping to power the
market’s recovery."

In spite of the brightening picture for PCs, Gartner analysts say the release
of Windows 7 in October won’t be much of a driver for the PC market’s return to

"Although the buzz surrounding Windows 7 has generally been quite
positive, we don’t expect the market to significantly deviate from its normal
seasonal trends in reaction to its release," says Shiffler. "Unless
Microsoft mounts a major marketing campaign in support of Windows 7, we think
consumers will simply adopt the new operating system as they would normally buy
new PCs and/or replace old ones. As for professional users, we still expect
them to put off adopting the new OS for at least a year until they have fully
tested their applications against it."