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Analyst firm cuts 2009 PC growth expectations by 64%

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Analyst firm cuts 2009 PC growth expectations by 64%

El Segundo (CA) – iSuppli the first major market research firm to drastically cut its PC outlook for 2009. Amid rapidly deteriorating conditions in the global economy and financial system iSuppli said that it has reduced the expected growth rate from 11.9% to 4.3%. The company believes the market will improve in 2010, but fall behind previous expectations as well.

The shipment forecast translates in a nearly two-thirds reduction of estimated growth, which was prompted by a global economy that changed dramatically “and in many ways irrevocably.” iSuppli analyst Matthew Wilkins said that the magnitude of the banking collapse has been so great that its impact on the availability of credit has affected large corporations, small businesses and people on the street.  

“The result of the financial turmoil is less money to spend, and often that money is itself more expensive,” Wilkins said. “With less money to spend, application markets, like PCs, have been impacted.” While the PC market has consistently posted growth rates of more than 10% over the past five years, already 2008 may be different.

“Real issues – such as difficulties in paying staff, or making rising mortgage payments – are affecting businesses as well as consumers,” Wilkins said. “In light of such financial issues, the task of refreshing or acquiring new IT equipment has taken a back seat.”

iSuppli believes that desktop PCs in 2009 will suffer a shipment decline of approximately 5%, while notebook PCs will achieve growth of about 15%. The forecast of growth in notebook shipments arises from the fact that the segment is currently performing very well and has strong momentum—not to mention the very attractive pricing for low-cost notebooks, known as netbooks. iSuppli believes demand for netbooks will show less of a reduction in 2009 than other notebook platforms, primarily due to their lower average selling prices.

For 2010, iSuppli expects a 7.1% growth in unit shipments, down from the previous outlook of a 9.4%.

Notebooks have been the drivers of PC sales for quite some time now and a decline in desktop PC shipments is not really surprising. However, if Jack Gold from J. Gold Assocatiates is right, then the traditional notebook might be in trouble as well. Gold believes that the business use of smart phone devices will grow quickly while “laptop deployments will slow dramatically”. In fact, a survey contacted by the firm found that over the next 3 years, business deployment of smart phones devices will increase at a rate 4 times greater than that of notebooks, and business applications deployed to smart phone devices will grow at twice the rate of those deployed to notebooks.  Gold said that the survey included more than 340 large and small companies in North America and Western Europe.