PC Shipments Slow in 2011, But Growth Expected in 2012

A pessimistic economic outlook in the United States and Western Europe are major contributing factors to the slow growth of the PC market in 2011, according to preliminary research from IT analytics firm Gartner, although competition from increasingly capable mobile devices and tablets is affecting the market and PC vendors strategy, the report noted. The broad slowdown in shipments is expected to have a lasting short-term effect: Total unit shipments in 2012 are expected to barely reach 400 million units, which was originally a target for 2011.

Worldwide PC unit growth is on pace to total 364 million units in 2011, a 3.8 percent increase from 2010, according to Gartner’s preliminary forecast. The notably lower outlook for 2011 PC growth is largely due to sharply downgraded forecasts for Western Europe and the United States in the second half of the year, the report noted. However, PC shipments are forecast to see better growth by the end 2012, when sales are expected to reach 404 million units, a 10.9 percent increase from 2011.

"Western Europe is not only struggling through excess PC inventory, but economic upheaval as well," said Ranjit Atwal, research director at Gartner. "U.S. consumer PC shipments were much weaker than expected in the second quarter, and indications are that back-to-school PC sales are disappointing. An increasing pessimistic economic outlook is causing both consumer and business sentiment to deteriorate in both regions. We’re expecting consumer spending to tighten in response. Business spending will also tighten, but less than the consumer space."

Gartner’s PC unit growth for both 2011 and 2012 has been reduced from previous projections: from 9.3 percent growth for 2011 and from 12.8 percent growth for 2012. The lower outlook for 2012 is the result of a weaker 2011, and also a slower start to 2012 with an expectation for better growth in the second half of next year as economies stabilize and new mobile PC form factors enter the market. Gartner analysts said that while PCs remain important to consumers and businesses, purchases could be delayed, especially when there are complementary devices such as tablets that are seen to be more attractive.

"Media tablets have dramatically changed the dynamic of the PC market ,and HP’s decision to rethink its PC strategy simply highlights the pressure that PC vendors are under to adapt to the new dynamic or abandon the market," said George Shiffler, research director at Gartner. "Vendors’ tried and true business models are failing as traditional PC functionality is extended to other devices, and users continue to lengthen PC lifetimes. Vendors only seem to be flailing as they look for quick fixes to their problems. Unfortunately, the resulting chaos is just creating more confusion across the entire PC supply chain, impacting sell-in."

To read the original eWeek article, click here: PC Shipments Slow in 2011, Growth Seen in 2012: Gartner Report