The Channel Wire

March 06, 2009

Global research firm International Data Corporation (IDC) suggested that worldwide PC shipments will drop 4.5 percent this year -- a less dire forecast than the near-12 percent decline being predicted by Gartner, but brutal nonetheless. IDC did say, however, that shipments would see a gradual recovery in 2010.

IDC in December suggested PC shipments would fall by 3.8 percent. Its revised forecast, released Thursday, confirmed the first half of 2009 would see the worst of it, with first-half shipments falling eight percent.

IDC put the total number of worldwide PC shipments in 2009 at 282 million, down from 295.2 million in 2008. Richard Shim, research manager, Personal Computing at IDC, said in a statement that an across-the-board pullback in consumer spending was the main factor.

But 2010 may see some bounce-back, IDC said in its report, and as shipments pick up again could grow to what IDC expects to be 300.9 million units shipped.

As IT research firms around the world work to gauge just how bad PC business will get this year, the average selling price (ASP) of PCs is also in decline and hurting vendors even more, another research house said.

According to a Technology Business Research report released Thursday, ASP decreases are doing more significant damage to PC business for major vendors like Hewlett-Packard, Dell, Lenovo and Apple.

Those four vendors' combined unit volume sales fell five percent in the fourth quarter of 2008, TBR said, but the collective ASPs dropped as much as 13 percent in the fourth quarter compared to the same period in 2007.

"While the addition of netbooks to the product mix directly drove down ASPs, their presence in the market affected ASPs across the product spectrum," said TBR analyst Ezra Gottheil in an e-mail note on Thursday. "Netbooks showed both consumer and business purchasers that, for most uses, they do not necessarily need top-of-the-line PCs."

The vendors' biggest challenge may be in the decline of ASPs, Gottheil suggested, because of typically lower profit margins on lower-priced models. Gottheil recommended vendors look to establish long-term relationships with buyers and get more at the sweet spot of post-sale services. If that happens, Gottheil wrote, "the winner's circle may contain different players from those who stand there now."