PC shipments grow, but revenue slides

chart down

It may come as a surprise that the number of PCs shipped this year hasn't actually fallen it's set to grow 2.8 per cent from last year, despite sales pressures from the recession. Next year should be much better, according to Gartner, which predicted shipment growth of 12.6 per cent in 2010.

"Shipments in the third quarter of 2009 were much stronger than we expected, and that alone virtually guaranteed we would see positive growth this year," said George Shiffler, research director at Gartner, in a statement.

However, he noted that last year's sales were weak, so the growth seems stronger than it really is.

"We're anticipating seasonally modest growth in the fourth quarter of 2009, but because shipments were so weak in the fourth quarter of 2008, growth will appear quite strong," he said. "This could lull vendors and market watchers into thinking the market is recovering faster than it really is."

But where's the money?

And that's the good news. The bad news, according to Gartner, is that the revenue from those PCs slid nearly 11 per cent from 2008 and will gain back just 2.6 per cent next year.

"Blame this year's drop in market value on the unprecedented declines in PC average selling prices (ASPs) we've seen this year," Shiffler said.

He blamed the price pressure on customers looking for "good enough" computers and retailers trying to offer the lowest prices possible.

"We expect PC ASP declines to slow as the market recovers, but given the market's competitive dynamic, we don't see PC ASPs rising any time soon," Shiffler said. "As a result, growth in the market value of shipments will significantly lag shipment growth next year and beyond."

What about Windows 7?

Windows 7 won't be helping, Gartner said. Despite Microsoft claiming record sales, the analyst firm said customers aren't going to run out and upgrade just to get their hands on the shiny new OS.

"We just don't see consumers buying new PCs solely because of Windows 7," said Shiffler. "We are expecting a modest bump in fourth-quarter consumer demand as vendors promote new Windows 7-based PCs, but the attraction will be the new PCs, not Windows 7."

He predicted businesses won't look to move to Windows 7 until the end of next year, hurting already struggling corporate sales.

"We don't see businesses mainstreaming Windows 7 much before the end of 2010," Shiffler said. "We think many businesses will try to shift replacements to the back end of next year so as to sync their adoption of Windows 7 with their PC refresh. That will put a damper on early 2010 shipments."


As ever, netbooks - or as Gartner calls them, 'mini-notebooks' - are propping up the market, but they won't be for ever.

This year, mobile PC shipments jumped 15.4 per cent, with the number of netbooks shipped sets to climb from 29 million this year to 41 million next year.

"We've raised our near-term forecast for mini-notebooks in response, but we have also narrowed our scenarios for them. Mini-notebooks are facing increased competition from other low-cost mobile PCs, as well as alternative mobile devices," said Shiffler.

"They are rapidly finding their level in the market, and we expect their growth to noticeably slow as early as next year," he added.