VARs brace as PC sales plunge

With PC shipments set to take an unprecedented nosedive this year, hardware VARs are rapidly scaling back on inventory and turning to alternative revenue streams.

Figures released by analyst Gartner last week predicted that global PC shipments would slump to 257 million this year, a drop of 11.9 per cent on 2008. The PC market suffered its worst year to date in 2001, when shipments fell by 3.2 per cent.

Stewart Hayward, commercial director for online VAR WStore, said: “This news comes as no surprise. There has been a slowdown in the corporate space and people are buying fewer desktops and laptops.”

Gartner predicts that the slowdown will hit both emerging and mature markets hard, with double-digit declines expected across the board. Netbooks will remain one of the market’s few bright spots, with an 80 per cent hike in shipments projected to fuel a nine per cent rise in overall notebook shipments.

Desktop shipments are expected to plummet 31.9 per cent to 101.4 million units. Rob Lovell, chief executive of hosted desktop specialist ThinkGrid, claimed businesses are increasingly wary of making big, CapEx investments in hardware.

“People have become much more aggressive in trying to save money and are looking outside their traditional way of doing things,” he said. “The thin-client market is getting more interesting. It is not for every customer, but it is evolving
fairly quickly and is going to suck up some of the PC market.”

Simon Aron, managing director of Eurodata, claimed people’s antipathy towards Windows Vista had been another factor to affect the PC market. “People are not buying new PCs and a lot of that is not to do with the hardware, it is to do with the operating system,” he said.

“Windows XP is very stable, Vista is not that popular and 7 is just around the corner. A lot of people are biding their time.”

Gartner claimed that VARs and vendors alike have been quicker to react to the drop in demand than they were eight years ago. The analyst said vendors have been quick to pass word up the supply chain to slow manufacturing, while resellers have rapidly scaled back on inventory.

Hayward said that having survived the dotcom crash, WStore had made a conscious decision to opt for a virtual warehousing model.

“Cashflow is king, and that means having no inventory,” he said. “I am sure a lot of people, and not just in IT, are scaling back on inventory.”