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Forecasts Suggest Slower PC Growth Ahead

In the latest indicator that the slowing economy is putting a dent in PC growth, market researcher IDC has lowered its sales forecast for the year, despite a robust first half.

IDC had forecast 19.8 percent worldwide growth of PCs but has dropped that prediction to 17 percent, according to quarterly PC Tracker report, released Thursday. Pent-up demand following the recession of 2008 and early 2009 led to a 25 percent increase in sales in the first half of this year, according to IDC.

But as the economy started to falter, some of that momentum fell with it. In a telling sign that sales would not be as robust as previously predicted, Intel last week cut its revenue forecast just a month after raising it.

In July Intel projected revenues of $11.2 billion to $12 billion for the third quarter. But last Friday, Intel revised that projection with a forecast that revenue would be in the $10.8 billion to $11.2 billion range.

Similarly, IDC is now calling for an 11.8 percent increase in PC sales in the last six months of the year, less than half the growth pace set in the first half of the year.

Despite the revision in PC sales growth, IDC analyst Loren Loverde said in a statement that PC market looks relatively strong and should see double-digit gains. "Strong demand, aggressive pricing, and active product development will continue to fuel solid growth through the next several years," he stated.

IDC is projecting worldwide PC growth of 13 percent next year and in the 11 percent range between 2010 and 2014. In the United States, growth will be lower: 10 percent this year, 9 percent in 2011, and an in the 8.5 percent range in the subsequent three years.

"After several years of carrying the load in terms of shipment growth for the PC industry, the U.S. consumer market is getting fatigued," said Richard Shim, research director of IDC's Personal Computing program, in a statement. "Fewer U.S. consumers are expected to update their PCs this holiday season. Fortunately, large businesses are expected to reinvest in their PCs over the next several quarters, helping to drive double-digit shipment growth in the U.S. PC market this year."

Mainstream notebook PCs will continue to be dominant, set to represent a 70 percent share of all PCs shipped by 2014, IDC said. Netbook PC growth will start to see pressure from slate PCs and devices such as Apple's iPad, IDC said.

About the Author

Jeffrey Schwartz is editor of Redmond magazine and also covers cloud computing for Virtualization Review's Cloud Report. In addition, he writes the Channeling the Cloud column for Redmond Channel Partner. Follow him on Twitter @JeffreySchwartz.

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