PCs

Gartner forecasts 2010 PC growth, business upgrades, iPad impact

See Gartner's projections for 2010 PC sales as well as analyst statements about the business upgrade cycle, netbooks, and iPads. And, Jason Hiner offers a sanity check on the research.

Gartner is now projecting 19% growth in worldwide PC shipments for 2010, predicting a jump from 308.3 million units sold in 2009 to a total of 367.8 million in 2010. But, the research company also sees some trouble brewing in the second half of the year. Here's a compilation of statements from Gartner analysts on the current state of the PC market, as well as my quick commentary at the end.

PC growth: Slowing down again?

Ranjit Atwal, research director at Gartner:

"The PC market revived in the first half of 2010, but the real test of its resilience is yet to come. We have reduced our forecast for second-half 2010 PC growth to 15.3 percent, approximately 2 percent below our previous forecast, in light of the uncertain economic outlook for the United States and Western Europe. There is no doubt that consumer, if not business PC demand has slowed relative to expectations in mature markets."

Computers now a 'must-have' for consumers

Atwal:

"Consumers buoyed the PC market in 2009 as businesses delayed their purchases. The slow pace of economic recovery and austerity measures in Europe have made PC suppliers very cautious in 2010. However, 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."

Business upgrades still in holding pattern

Atwal again:

"Businesses that delay replacing [PCs] 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. 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."

Netbooks are falling out of favor

Raphael Vasquez, Gartner research analyst:

"We still think the mini-notebook has a place in the mobile PC market, but not as a substitute for a standard mobile PC. Indeed, the recent decline in mini-notebooks' share of the mobile PC market reflects a general realization among buyers that mini-notebooks are less-than-perfect substitutes for standard low-end laptops. Buyers who once would have bought a mini-notebook based solely on its low price now seem more inclined to buy a low-end standard notebook, especially since the prices of the two have converged. Mini-notebooks are slowly but surely carving out a market niche for themselves as companion devices. However, the emergence of media tablets is a growing threat to that niche."

Impact of iPad

George Shiffler, Gartner research director:

"The iPad hasn't had much of an impact on mini-notebook units so far, if only because it is generally priced higher than most mini-notebooks. However, we anticipate lower-priced iPad imitations will begin to take larger bites out of mini-notebook units as they are released next year."

Sanity check

There has been a lot of pent up demand in the PC market this year because both consumers and businesses put off purchases whenever possible during the economic slow down in 2008 and 2009. Gartner's data now shows that consumers are the ones driving the PC growth in 2010 much more than businesses.

That's pretty consistent with what TechRepublic is hearing from IT leaders. They still aren't doing massive across-the-board PC refreshes yet, although many of them claim they are planning upgrades. Gartner's impatient warning to businesses that they face higher support and migration costs by waiting rings pretty hollow.

Analysts and industry vendors have been singing that tune to CIOs for years and yet IT departments continue to wait until machines fail or there's a business need to replace them, in most cases, and that strategy has resulted in staggered upgrades that in general put less strain on the IT department than a massive refresh.

I also take issue with Gartner's assertion that the iPad is not having an impact on netbook and low-end notebook sales. I think it's pretty clear that many of the 3+ million iPad customers bought them as companion devices for light computing -- not laptop replacements -- and that same demographic is one of the primary consumers of netbooks and cheap notebooks. And, recent data has shown that iPad sales have taken a nice chunk out of the notebook market, at the expense of other leading laptop makers.

About

Jason Hiner is Editor in Chief of TechRepublic and Long Form Editor of ZDNet. He writes about the people, products, and ideas changing how we live and work in the 21st century. He's co-author of the upcoming book, Follow the Geeks (bit.ly/ftgeeks).

11 comments
RTHJr
RTHJr

As a PC Support person for SOHO and serving also the home improvement market, I do see many low income people that actually forgo furniture and even a bed to sleep on...but they gotta have their Mac or PC!

ShortStock
ShortStock

There is a flood of good used PCs on the market with XP or better legally installed for between 2 or 3 hundred. These PCs are left over from companies that bit the dust or short term leases. We replaced a lot of our 6 or 7 year old machines and are very happy. Had to replace a couple of fans.

ronaldwwoods
ronaldwwoods

Jason, a short peeve. "Data" is the plural form of "datum" and should be treated as such. Your statement: "And, recent data has shown ..." should have read "And, recent data have shown ..."

bergenfx
bergenfx

As "data" is used as a mass noun in this case, rather than a count noun, it is perfectly acceptable to use it in the singular.

ebsfrmr
ebsfrmr

I believe you are correct in your Sanity Check statements. With the economic climate as it is right now, there is a lot of holding off. The coming of iPad clones is one reason for putting off these companion computer purchases. Don't forget smartphones are also carrying more of our daily computing load.

rowdydave
rowdydave

When is somebody going to take it to the next step and build a Windows 7 PC you can wear on your belt that is also a phone, and can be docked wherever you go? This is the next evolution of the PC, and I can't fathom why no one is "pre" announcing one. The technology exists. Microsoft is the logical company to partner with HTC or another hardware manufacturer to build it, though they've been missing from the innovation train quite some time now. It would creat a whole new niche, making the laptop somewhat obsolete, and opening a whole new hardware market for third-party products to support it. Why have none of the big names put forward this project? It seems to me this is where portable computing should be headed. Or am I just crazy?

bkfriesen
bkfriesen

I also agree that smartphones are having a growing impact on computing device choices. As an iPhone user for nearly 2 years, I wouldn't even consider a netbook. Without the iPhone, I would almost certainly have purchased a netbook (as opposed to a laptop) for its portability. I am considering the purchase of an iPad. The activities that tend to be cumbersome on an iPhone are easy on an iPad (more screen real estate). I'm also considering a midrange laptop as a replacement for my desktop in the near future.

Rowfus
Rowfus

Given the history of business predictions during the past half-decade, there's no reason to me to do anything but wait and hope Gartner is right. My own assessment, for whatever it might be worth, is that business, academia, government, and the military are holding their breaths as they wait to see what will happen with the mid-term congressional elections and the economy. It doesn't look good. Part of the problem with my industry is that, like a misguided actor, it believes its own press. (Jason, I don't mean you. I wish more tech writers had your sense and sobriety.) There's also little long-term memory and so little accountability for pundits who get it wrong, over and over and over again, but somehow stay in punditry. Bottom line, if the economy comes back, spending will come back, and maybe this will be the Christmas season we haven't had since 2006. But I'm not holding my breath.

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