Revised PC Forecast Shows Much Lower Global Sales in 2011

By Ed Silverstein September 09, 2011

Given the current sluggish economy, Gartner has issued a revised, lower projection for the global PC market in 2011, with the research firm now saying it will increase 3.8 percent.

Gartner had predicted the market would increase 9.3 percent in 2011.

The economies in Western Europe and the United States are largely to blame for the lower projections.

"Western Europe is not only struggling through excess PC inventory, but economic upheaval as well," Ranjit Atwal, research director at Gartner, said in a press release. "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."

But the news also comes as IBM already stopped making PCs and Hewlett-Packard may spin off its PC division.

The new numbers from Gartner suggest that global PC sales will total 364 million units during 2011.

However, a better outlook is offered for 2012. PC shipments by the end of 2012 are projected by Gartner to be at 404 million units, a 10.9 percent increase from 2011. In an earlier forecast, PC unit growth for 2012 was predicted to be 12.8 percent.

“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 said.

“Even so, the slowdown in the market is notable,” Gartner adds. “Total unit shipments in 2012 are expected to barely reach 400 million units, which was originally a target for 2011.”

Even with the new numbers, Gartner argues PCs remain “important” to consumers and businesses, but purchases “can be easily delayed, especially when there are complementary devices that are seen to be more attractive.”

"More worrisome for the long term is that Generation Y has an altogether different view of client devices than older generations and are not buying PCs as their first, or necessarily main, device," Atwal adds. "For older buyers, today's PCs are not a particularly compelling product, so they continue to extend lifetimes, as PC shops and IT departments repair rather than replace these systems."

"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," George Shiffler, research director at Gartner, adds. "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."

In a recent commentary, Mark Dean, IBM’s new Middle East and Africa CTO, says the world is in a “post-PC era.” His personal “primary computer now is a tablet.”

IBM dropped its personal computer business in 2005, and sold its PC division to Lenovo.

“While PCs will continue to be much-used devices, they’re no longer at the leading edge of computing. They’re going the way of the vacuum tube, typewriter, vinyl records, CRT and incandescent light bulbs,” Dean said in a story appearing on TechZone 360.

In addition, as part of a controversial new business focus, HP is planning on spinning off its personal computer business, TechZone360 reports.

Want to learn more about the latest in communications and technology? Then be sure to attend ITEXPO West 2011, taking place Sept. 13-15, 2011, in Austin, Texas. ITEXPO offers an educational program to help corporate decision makers select the right IP-based voice, video, fax and unified communications solutions to improve their operations. It's also where service providers learn how to profitably roll out the services their subscribers are clamoring for – and where resellers can learn about new growth opportunities. To register, click here.

Ed Silverstein is a TechZone360 contributor. To read more of his articles, please visit his columnist page.

Edited by Rich Steeves

TechZone360 Contributor

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