PC market still buoyant, Gartner claims

But shadow of the predicted economic slowdown is hanging over the industry

Despite an 11 per cent rise in worldwide shipment sales for 2008, Gartnerhas warned that growth could fall to single digits if the market falls victim to a weaker global economy.

According to the analyst firm, worldwide PC shipments will total 239 million units in 2008, up 10.9 per cent from 2007 shipments of 264 million units.

George Shiffler, research director at Gartner, said: “In many respects, the PC market is fundamentally in good shape. Mobile PCs continue to exhibit strong momentum, emerging-market growth remains robust, and desk-based PC replacement activity is stirring.”

“However, a deepening U.S. recession, the rising possibility of a sharp slowdown in China's economy following the Beijing Olympics, and the elevated price of oil mean global PC shipments face increasing economic headwinds,” he continued.

Gartner has said that worldwide demand for mobile PCs remains a key driver in the PC market's growth. The analyst house revealed that technology and design improvements have not only lowered the price of mobile PCs but also improved their value proposition in relation to desk based PCs.

According to Gartner emerging markets are also key drivers with PC unit shipments growing 22 percent in the fourth quarter of 2007, accounting for 60 percent of worldwide PC unit growth, and was fuelled by strong economic growth.

Shiffler added: “Rapid economic growth is not only stimulating PC demand among business, governments and educational institutions, but also generating new demand among the ever-growing numbers of increasingly affluent consumers."

Gartner has also predicted that replacement PCs are poised to become a key driver of PC shipments explaining that desk-based PCs experienced their last major replacement cycle from 2004 to 2005. Gartner's replacement model signifies that desk-based PCs are on track to experience another growth spurt from late 2008 to early 2010.

“Replacements account for 60 percent of PC shipments worldwide and nearly 80 percent of U.S. PC shipments, so growing replacement activity will provide a helpful boost to PC growth,” he said.

“Slowing gross domestic product (GDP) growth can and does affect PC shipments through its impact on consumer incomes and business profits,” said Shiffler.

Shiffler said: “Although the impact has probably softened over time as PC prices have fallen and PCs have become more indispensable to work and play, PCs are still far from being completely recession-proof. A deeper and more extended global slowdown emanating from the U.S. and China would slow PC unit growth even more by sapping mobile PC demand, slowing emerging-market growth, and delaying replacement activity.”