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March 2, 2009

Gartner warns of huge slump in PC sales

2009 will see sharpest decline on record

By Steve Evans

Analyst house Gartner has warned that the PC industry will see its biggest ever decline in unit sales during 2009, falling 11.9% from 2008.

PC shipments are expected to hit 257 million this year, while the decline of nearly 12% dwarfs the 2001 slump when figures fell 3.2%. Mature markets will see a decline of 13%, while Gartner expects emerging markets to see a decline of 10.4% in 2009.

George Shiffler, research director at Gartner, said: “Growth in both emerging and mature markets will be driven by similar dynamics even if the precise impacts vary somewhat. Slower GDP growth will generally weaken demand and slow new penetration, lengthening PC lifetimes will reduce replacements, and supplier caution will keep inventories at historic lows until confidence in a recovery eventually firms.”

While desktop PC sales are expected to fall 31.9% to 101.4 million units in 2009, the figures overall will be cushioned by sales of mini-notebooks, which are expected to total 21 million units this year, up from 11.7 million in 2008. Despite falling prices, the sales will not be enough to prevent the market’s steep decline, the firm said.

Angela McIntyre, research director at Gartner, said: “Systems with larger screens and greater capabilities cost more but prices in general continue to fall. In late 2008, the average price in the U.S. for a mini-notebook with an 8.9” screen, Microsoft Windows XP and a 160 GB hard drive was around $450. We expect the average price of the same machine to drop to $399 by the end of this year.

“Mature markets continue to be the primary consumers of mini-notebooks, but as prices continue to fall, they are likely to attract increasing numbers of emerging market buyers.”

Rob Lovell, CEO of hosted desktop vendor ThinkGrid, said he is not surprised by these figures and that PC sales could be in terminal decline as operators switch to on demand services.

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“The downturn in the economy has just magnified and accelerated the trend of declining PC sales,” Lovell said. “With the credit crunch biting, organisations have found that they can’t afford to make capital investments in PCs. Unfortunately, for PC manufacturers this isn’t just a blip but a sign of things to come. Businesses will turn to hosted desktops and cloud services rather than investing in local hardware and software.”

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