PC market to hit nadir in 2009

The global PC market is set to suffer its sharpest ever decline in shipments this year, according to analyst Gartner.

The research firm expects worldwide shipments to slump to 257 million in 2009, an 11.9 per cent drop on last year's figure. A decline of this magnitude would be almost four times as bad as 2001, when shipments suffered their worst contraction to date falling 3.2 per cent.

Gartner research director George Shiffler said: “The PC industry is facing extraordinary conditions as the global economy continues to weaken, users stretch PC lifetimes and PC suppliers grow increasingly cautious."

The analyst anticipates that, unlike previous slowdowns, this year both established and emerging markets will be hit hard. Emerging markets' slowest year of growth to date was 2002, when shipments rose 11.1 per cent. But 2009 is set to see a 10.4 per cent drop off in shipments in emerging markets.

2001 was the worst on record for mature markets, when shipments fell off 7.9 per cent. This year will comfortably eclipse that, however, as Gartner anticipates a 13 per cent drop. One of the few bright spots in the market is netbooks, with global shipments expected to spike almost 80 per cent this year to 21 million.

This will help to drive a 9 per cent increase in notebooks as a whole, with shipments expected to total 155.6 million units. But desktops will be severely affected, with shipments predicted to fall back 31.9 per cent to 101.4 million units.

Gartner said that the channel is better equipped to cope with the downturn than it was eight years ago. The analyst stated that investment in supply chains from both resellers and vendors has afforded channel firms much better visibility of where the market is going.

Charles Smulders, managing vice president of Gartner, said: “In the fourth quarter of 2008 vendors saw signals that demand was weakening and sent signals up the supply chain to stop building. At the same time, the channel cut back inventory due to a combination of economic uncertainty and the credit squeeze.

"Unlike 2001, vendors were able to react relatively quickly to the signals and push the inventory risk on to the component suppliers. We expect the pattern of stronger sell out demand than sell in to continue through the first half of 2009, with the channel choosing to hold inventory at historically low levels,” added Smulders.