Gartner Says Worldwide PC Shipments to Grow 2.8 Percent in 2009, but PC Revenue to Decline 11 Percent

Outlook for Global PC Market Noticeably Improved, but Analysts Remain Cautious

STAMFORD, Conn., - Accelerating mobile PC shipments will drive the worldwide PC market to grow again this year, according to Gartner’s preliminary fourth-quarter forecast. The new forecast predicts worldwide PC shipments will total 298.9 million units in 2009, a 2.8 percent increase from 2008. In 2010, PC shipments are projected to reach 336.6 million units, a 12.6 percent increase over 2009.

This forecast is more optimistic than Gartner’s final September forecast, which anticipated a 2 percent decline in shipments for 2009. “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. “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. This could lull vendors and market watchers into thinking the market is recovering faster than it really is.”

While PC shipments are now expected to increase in 2009, the market value of PC shipments is still projected to decline. The market value of global PC shipments is now forecast to total $217 billion in 2009, a 10.7 percent decline from 2008. Gartner is now projecting the market value of PC shipments to reach $222.9 billion in 2010, a 2.6 percent increase over 2009.

“Blame this year’s drop in market value on the unprecedented declines in PC average selling prices (ASPs) we’ve seen this year,” Mr. Shiffler said. “The rapid decline in PC ASPs reflects a marked shift towards lower price points as customers have looked for ’good enough’ PCs at the cheapest price, and vendors have tried to spur market growth by catering to ever-lower price points. 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. As a result, growth in the market value of shipments will significantly lag shipment growth next year and beyond.”

Gartner analysts reiterated their belief that Windows 7 will have a limited impact on holiday PC sales but noted that 2010 PC shipments could be affected. “We just don’t see consumers buying new PCs solely because of Windows 7,” said Mr. 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. The more critical question is, ’When will businesses make their move to Windows 7, and what will they do about replacements in the interim?’ We don’t see businesses mainstreaming Windows 7 much before the end of 2010. 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.”

Gartner’s new forecast indicates mobile PC shipments are on pace to reach 162 million units in 2009, a 15.4 percent increase over 2008. In 2010, mobile PC shipments are expected to reach 196.4 million units. Mini-notebook shipments, included in overall mobile PC shipments, are forecast to reach 29 million in 2009 and will grow to 41 million shipments in 2010. Meanwhile, shipments of desk-based PCs are expected to total 136.9 million units in 2009, a 9 percent decline from 2008. In 2010, desk-based PC shipments are forecast to reach 140.2 million units.

“Mobile PC shipments continued to get a significant boost from mini-notebooks,” said Mr. Shiffler. “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. They are rapidly finding their level in the market, and we expect their growth to noticeably slow as early as next year.”

Gartner’s preliminary forecast is subject to revision and will be superseded by its final forecast, which will be released in three weeks.

About Gartner:
Gartner, Inc. (NYSE: IT) is the world’s leading information technology research and advisory company. Gartner delivers the technology-related insight necessary for its clients to make the right decisions, every day. From CIOs and senior IT leaders in corporations and government agencies, to business leaders in high-tech and telecom enterprises and professional services firms, to technology investors, Gartner is the indispensable partner to 60,000 clients in 10,000 distinct organizations. Through the resources of Gartner Research, Gartner Consulting and Gartner Events, Gartner works with every client to research, analyze and interpret the business of IT within the context of their individual role. Founded in 1979, Gartner is headquartered in Stamford, Connecticut, U.S.A., and has 4,000 associates, including 1,200 research analysts and consultants in 80 countries. For more information, visit www.gartner.com.