PC Sales Slowing For Rest Of Year, Says Gartner

PC shipments are expected to increase by 19 percent in 2010 but much of that growth occurred already in the first half of the year, according to a new report by Gartner.

The research firm said second-half PC growth will be 15.3 percent, down about 2 percent from its previous forecast, due to uncertain economic conditions in the U.S. and Western Europe, according to Ranjit Atwal, research director at Gartner.

"The PC market revived in the first half of 2010, but the real test of its resilience is yet to come," Atwal said in a statement. "There is no doubt that consumer, if not business PC demand has slowed relative to expectations in mature markets. Recent dramatic shifts in the PC supply chain were in no small part a reaction to fears of a sharp slowdown in mature-market demand. However, suppliers' risk-aversion is as much a factor in these shifts as any actual downshift in demand."

Consumers buoyed the PC market last year while businesses delayed PC purchases. However, the slow pace of recovery in Europe has made PC suppliers more cautious this year, Atwal said. "Consumer demand is likely to remain strong even if the economic recovery stalls because consumers now view the PC as a relative 'necessity' rather than a 'luxury' and will continue to spend on PCs, even at the expense of other consumer electronic devices," said Atwal in the statement.

But the age of the average commercial PC is already at an all-time high and businesses may not be able to delay replacements much longer, according to Gartner.

"Businesses that delay replacing much longer risk alienating employees, burdening themselves with more service requests and support costs, and ultimately facing higher migration costs when they eventually migrate to Windows 7," Atwal said in the statement. "The bottom line is that businesses need to refresh their PCs sooner rather than later. Thus, the full bloom of the long-awaited professional PC refresh can't be more than a few quarters ahead."

Meanwhile, the impact of netbooks on the PC market has peaked and is now waning, according to Raphael Vasquez, research analyst at Gartner. Mini-notebooks' share of mobile PCs declined for the second straight quarter, falling nearly 18 percent. The overall share of netbooks to all mobile PC shipments is expected to reach 10 percent by 2014, down from nearly 20 percent in late 2009, according to Gartner.

"We still think the mini-notebook has a place in the mobile PC market, but not as a substitute for a standard mobile PC. Indeed, the recent decline in mini-notebooks' share of the mobile PC market reflects a general realization among buyers that mini-notebooks are less-than-perfect substitutes for standard low-end laptops," Vasquez said in a statement.

Next: Media Tablets Will Impact PC Sales

Buyers who once considered mini-notebooks based on price are now more inclined to buy a low-end notebook as prices between the two categories are nearly equal, according to Vasquez.

"Mini-notebooks are slowly but surely carving out a market niche for themselves as companion devices. However, the emergence of media tablets is a growing threat to that niche," he said in a statement.

Media tablets will affect the PC market, especially mini-notebooks, and the forecast reflects this impact," said George Shiffler, research director at Gartner, in the report.

"The iPad hasn't had much of an impact on mini-notebook units so far, if only because it is generally priced higher than most mini-notebooks," Shiffler said in a statement. "However, we anticipate lower-priced iPad imitations will begin to take larger bites out of mini-notebook units as they are released next year."