HP vindicated as PC shipment estimates slump

HP's decision to offload its flagging PC business appears to be justified after analyst firm Gartner reported that PC shipment growth will slow to just 3.8 per cent this year, despite sales increasing slightly compared with 2010.

The 3.8 per cent growth means that 352 million units are expected to sell in 2011, a slowdown caused by reduced forecasts in Europe and the US owing to new form factors and poor economic conditions, Gartner said.

PC sales are predicted to reach 404 million in 2012, up 10.9 per cent on 2011, but this is a marked reduction in expectations as Gartner had forecast the 404 million figure for 2011.

Gartner research director Ranjit Atwal said that the figures underline the difficulty facing PC vendors in convincing consumers and businesses to splash out on new kit.

"Today's PCs are not a particularly compelling product, so they continue to extend lifetimes as PC shops and IT departments repair rather than replace these systems," he said.

"An increasingly pessimistic economic outlook is causing consumer and business sentiment to deteriorate in both regions."

HP recently confirmed it is to move out of the PC hardware business and is looking for a buyer for the division, a move that appears to be justified in light of Gartner's disappointing outlook.

George Shiffler, research director at Gartner, suggested its decision highlights the tough market facing all PC vendors as devices like the iPad usurp their positions in the market.

"Media tablets have dramatically changed the dynamic of the PC market, and HP's decision to rethink its PC strategy highlights the pressure that PC vendors are under to adapt to the new dynamic or abandon the market," he said.

HP is also ditching its webOS platform and tablet strategy to focus on becoming a software business. As a result there has was a rush to pick up cheap HP TouchPads in the US and UK as the firm looks to shift the backlog.