Aug 31, 2010 (10:08 AM EDT)
Gartner Lowers PC Sales Forecast

Read the Original Article at InformationWeek

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Analyst firm Gartner has lowered its global forecast for PC market growth in the second half of the year, due to the uncertainty in the U.S. and European economies. PC shipments are projected to increase by 15.3% year over year in the second half, about 2% less than Gartner's previous forecast. For the full year, Garner estimates shipments will reach 367.8 million units, a 19.2% increase from 2009.'

"There is no doubt that consumer, if not business PC, demand has slowed relative to expectations in mature markets," Gartner research director Ranjit Atwal said in a statement released Tuesday. "Recent dramatic shifts in the PC supply chain were in no small part a reaction to fears of a sharp slowdown in mature-market demand. However, suppliers' risk-aversion is as much a factor in these shifts as any actual downshift in demand."

Computer makers' caution is buoyed by the slow pace of economic recovery in the U.S., particularly in the job market, and spending reductions by European governments to lower debt, Gartner said. Consumer spending was the engine behind PC market growth last year, and manufacturers fear the weakness in the economy could cause people to cutback. However, Gartner said computer makers might be being too cautious, given the importance of the PC in people's lives. "Consumer demand is likely to remain strong even if the economic recovery stalls because consumers now view the PC as a relative necessity rather than a luxury and will continue to spend on PCs, even at the expense of other consumer electronic devices," Atwal said.

While businesses held back last year during the economic recession, they are spending on PCs this year, because they can no longer wait to replace aging PCs, which are at an all-time high in companies. Gartner has predicted that business PC shipments will rise by 13.1% this year from 2009.

"Businesses that delay replacing much longer risk alienating employees, burdening themselves with more service requests and support costs, and ultimately facing higher migration costs when they eventually migrate to Windows 7," Atwal said. "The bottom line is that businesses need to refresh their PCs sooner rather than later. Thus, the full bloom of the long-awaited professional PC refresh can't be more than a few quarters ahead."