PC sales set for short-term slump

Poorer than expected PC sales in Japan, and a cautious outlook in the US, have offset strong demand in 2004 and forced market watchers to downgrade estimates for global PC shipments in 2005.

The updated forecast from IDC's Worldwide Quarterly PC Tracker lowers growth in total worldwide PC shipments for 2005 from 10.1 per cent in the November release to a slightly more modest 9.7 per cent.

However, the analyst firm expects demand to pick up in the next few years, and its growth forecast remains above eight per cent through to the end of 2009.

Total shipments are expected to reach 195.4 million in 2005 on growth of 9.7 per cent with total shipment value growing by 5.3 per cent to $209bn. Shipments are projected to reach 273 million in 2009 at a value of $245bn.

"Despite fears of slowing growth, particularly in the US consumer segment, the PC market was fairly robust in the fourth quarter of 2004 with strong demand in the consumer and business segments," said Loren Loverde, director of IDC's Worldwide Quarterly PC Tracker.

"While overall growth in 2005 will be slower than 2004, we expect to see continued strength in portables and in emerging markets.

"Although worldwide growth will slip into single digits this year, long-term drivers such as mobile adoption, replacement of older systems, and growing penetration will support healthy growth through to the end of the decade."

Although IT buyers in the US have indicated firm intentions to buy in 2005, IDC has kept US forecasts modest because of "a host of risk factors".

Roger Kay, vice president of client computing at IDC, said: "These factors include a recovery that appears to be getting long in the tooth, a lack of jobs growth, rising budget and trade deficits, persistently high oil prices, a treasury-draining foreign war, rising interest rates, a stock market that continues to move sideways, and record low household savings rates."

According to IDC's report, adoption of portable PCs continues to fuel growth in western Europe. Growth in portable PC shipments is expected to top 20 per cent in 2005 following 30 per cent growth in 2004 and nearly 40 per cent in 2003.

The consumer segment remains a key driver with portable shipments growth of more than 40 per cent outpacing the commercial segment by roughly five points. Growth of desktop PC shipments is expected to slow to low single digits from nearly 10 per cent in 2004.