Record decline for PC shipments, says Gartner

Netbooks can't save the PC industry from seeing its sharpest decline in unit shipments ever, the analyst firm Gartner has predicted.

This year, computer shipments will hit 257 million units, down 11.9 per cent from last year a worse decline than even the 3.2 per cent seen in 2001.

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

Mobile PCs think laptops and notebooks will grow nine per cent this year, while desktop shipments will fall 31.9 per cent, Gartner said. That mobile growth will be mostly from mini notebooks, or so-called netbooks.

While Gartner said netbooks would help "cushion" the market, it added that there simply isn't enough of them to hold off an overall decline, as the small-form notebooks are expected to make up just eight per cent of overall shipments this year.

That's partially because the cheap-and-cheerful devices are mostly sold in mature markets, but as prices fall, more could be sold in emerging markets, said Gartner research director Angela McIntyre.

"The mini-notebook market is dividing as vendors offer more systems with 9in to 10in screens in addition to those to with 7in to 8in screens," said McIntyre. "For the most part, users are moving toward systems with larger screens and greater capabilities; systems with 8.9in screens were the standard in the second half of 2008."

"Naturally, systems with larger screens and greater capabilities cost more but prices in general continue to fall. In late 2008, the average price in the US for a mini-notebook with an 8.9in screen, Microsoft Windows XP and a 160 GB hard drive was around $450 (317). We expect the average price of the same machine to drop to $399 by the end of this year."

Gartner also challenged the belief that emerging markets will offer stabilising growth as leading countries faces a recession, noting that emerging markets have seen their lowest growth since 2002, hitting just 11.1 per cent.

While mature markets have also slid 7.9 per cent, neither have hit the bottom, Gartner said. The firm predicted emerging markets would lose 10.4 per cent while mature markets would slide to 13 per cent losses.

"Growth in both emerging and mature markets will be driven by similar dynamics even if the precise impacts vary somewhat," Shiffler said. "Slower GDP growth will generally weaken demand and slow new penetration, lengthening PC lifetimes will reduce replacements, and supplier caution will keep inventories at historic lows until confidence in a recovery eventually firms."

"The impact of reduced replacements will be especially acute in mature markets, where replacements are estimated to account for around 80 per cent of shipments," he predicted.

Click here to read our top tips to tighten your firm's belt in a recession.