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September 8, 2011

Gartner cuts PC sales outlook

PCs are no longer a "compelling" product, says analyst house

By Steve Evans

Industry watcher Gartner has cut its forecast for PC sales for 2011 and 2012 as the perilous economic situation and the rise of tablet devices halts the computer market.

Gartner predicts that worldwide PCs sales will hit 352 million units in 2011, a rise of just 3.8% on 2010 figures. The analyst house had previously estimated growth of 9.3% this year.

Growth forecasts for 2012 have also been cut, with Gartner now suggesting growth of 10.9% over 2011 instead of the 12.8% it had previously estimated.

It is the sales in Western Europe and the US that are doing the damage to 2011’s figures, a trend which will continue into 2012. "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," he added.

The emergence of tablet devices – with Apple’s iPad leading the charge – is also having an impact on PC sales, with younger people looking to more portable devices instead of their desktop counterparts, Atwal said.

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"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 said. "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."

Gartner also criticised the PC vendors for its reaction to the arrival of tablets, accusing them of going for quick fixes that only add confusion to the space.

"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," he said.

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