PC Market Poised To Slump For First Time Since 2001

Not even netbooks will be able to save the slumping PC market from seeing an overall downturn in 2009, which would result in the first annual drop for the segment since 2001, according to a new report.

Meanwhile, Dell regained the No. 1 spot in the U.S. PC market in the second quarter, after dropping to No. 2 in the previous quarter, according to a separate report from research firm Gartner.

Dell in the second quarter barely edged out rival Hewlett-Packard in the U.S., shipping 4.25 million units for a 26 percent share of the market, compared to HP's 4.21 million units and 25.7 percent share, Gartner said. Gartner's data includes desktops, mobile PCs and X86 servers.

Acer was the No. 3 PC vendor in the U.S. with 14.2 percent of the market, followed by Apple Computer at 8.7 percent and Toshiba at 6.8 percent, according to Gartner.

U.S. PC shipments for the quarter dropped to 16.4 million units, down 1.2 percent from the second quarter of 2008, beating Gartner's expectations for a 12 percent year-over-year decline. Desktop PC shipments showed a double-digit decline for the quarter as mobile PC shipments grew in the 20 percent range, Gartner said.

Second-quarter worldwide PC shipments dropped 5 percent year-over-year, dipping to 68.1 million units, down from 71.7 million units in the second quarter of last year, Gartner said.

Nevertheless, the market performed better for the quarter than Gartner's predicted decline of 9.8 percent. "Though the market was still in decline, the better-than-expected results can be interpreted as a small sign of a PC market recovery in terms of shipment volumes in some regions," said Mikako Kitagawa, principal analyst at Gartner, in a statement. "PC shipments in Asia/Pacific and the U.S. were better than our expectation, while shipments in the Europe, Middle East and Africa (EMEA) region indicated on-going weakness."

Global shipments of desktop PCs could decline to 287.3 million units this year, down from 299.2 million units just last year, according to iSuppli. The firm had previously predicted growth of 0.7 percent in the shipments.

The last time the PC market saw any decline in shipments was in 2001, when the dot-com bubble burst. The fact that desktop sales have dropped this year instead of increasing slightly was an oddity and points to the state of the economy.

"An annual decline in unit shipments is highly unusual in the PC market," Matthew Wilkins, principal analyst of computer platforms for iSuppli, said in a statement. "Even in weak years, PC unit shipments typically rise by single-digit percentages. The last decline -- in 2001 -- was a 5.1 percent decrease in unit shipments due to the extraordinary impact of the dot-com bust, which caused inflated IT spending levels from the previous years to collapse."

iSuppli defines the overall PC market as consisting of three different segments: desktops, entry-level servers and notebooks.

According to the research firm, the main culprit driving the dip in overall PC shipments is the desktop market, which iSuppli expects to plummet 18.1 percent to about 124.4 million units, compared with 151.9 million units in 2008.

Entry-level servers are also expected to dip this year from 7.7 million in 2008 down to 6.9 million units in 2009, for a drop of 9.5 percent.

The one bright spot for the PC market in 2009 continues to be the notebook category, which iSuppli predicts to grow 11.7 percent, reaching 155.97 million units; in 2008, the notebook segment shipped 139.6 million units.

"Mobility is winning out in the PC market," Wilkins said in the statement. "Businesses and consumers continue to embrace notebook PCs because of the benefits of mobility and the near-equal performance and feature set. This is cutting into desktop PC shipments."

Jennifer Hagendorf Follett contributed to this story.

This story has been updated.