In In its new report, research firm Gartner has slashed its growth forecast for the global PC market this year to 3.8 percent from 9.3 percent, citing slower economies in Western Europe and the United States, and a boom in media tablets. Primarily it is the iPad phenomenon that is responsible for denting the demand in personal computers. This is because in USA and Western Europe a Tablet means the iPad. The outlook for 2012 is also lower. Total unit shipments in 2012 are expected to barely reach 400 million units, which was originally a target for 2011.
George Shiffler, research director at Gartner, said, Media tablets have dramatically changed the dynamic of the PC market and HP's decision to rethink its PC strategy simply highlights the pressure that PC vendors are under to adapt to the new dynamic or abandon the market. Vendors' tried and true business models are failing as traditional PC functionality is extended to other devices, and users continue to lengthen PC lifetimes. Vendors only seem to be flailing as they look for quick fixes to their problems. Unfortunately, the resulting chaos is just creating more confusion across the entire PC supply chain, impacting sell-in.
In the month of August, HP had stunned markets by saying it may shed its PC business, which has been the worlds largest after the companys $25 billion acquisition of Compaq in 2002. One of the reasons due to which HP is interested in hiving off its PC arm is because it sees heightened competition and less profits in this sector. The Chinese PC vendor Acer reported its first quarterly loss in history last month. The company also reported that it would be impossible for it to break even for the full year. Companies like Dell and Lenovo are also witnessing sluggish sales, even though they continue to be profitable.
Ranjit Atwal, research director at Gartner says, More worrisome for the long term is that Generation Y has an altogether different view of client devices than older generations and are not buying PCs as their first, or necessarily main, device. For older buyers, todays 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.
Pessimism in the economy in general is also contributing to the decline in PC sales. An increasing pessimistic economic outlook is causing both consumer and business sentiment to deteriorate in both regions. We're expecting consumer spending to tighten in response. Business spending will also tighten, but less than the consumer space, says Ranjit Atwal.
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