PC outlook improves but 2Q06 growth below 10%

Stan Beer
Sunday, 17 September 2006 07:29

IT Industry - Market

The worldwide PC market continued to expand at a healthy pace in the second quarter of 2006, although growth was slower than in recent quarters, according to a new report.

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IDC's Worldwide Quarterly PC Tracker found that total PC shipments exceeded 52 million units and growth was 9.8% for the quarter, 0.6% behind expectations. Despite the slower second quarter, IDC expects the second half of 2006 to be strong enough to maintain double-digit growth for the year.

"Mature regions, like the United States, Western Europe, and Japan, are exhibiting more conservative growth trends, while developing regions are not only growing faster, but exceeding expectations," said Loren Loverde, director of IDC's Worldwide Quarterly PC Tracker. "Although this is an important development trend, it's also the case that the bulk of portable PC adoption – the leading market driver – remains concentrated in the more mature markets. As a result, there's plenty of opportunity for PC companies to grow, but they need to adequately target the growth segments in each region."

PC shipments in Western Europe and Japan were considerably slower than expected in the second quarter, largely due to short term factors such as inventory reduction and the FIFA World Cup. Growth in Asia/Pacific excluding Japan and Rest of World (including Latin America, Canada, Central and Eastern Europe, and Middle East and Africa) was down slightly from the prior quarter, but still ahead of expectations while growth in the United States rose slightly from the first quarter.

In light of the 2Q06 results, IDC's growth projections for 2006 were lowered slightly from the June forecast. However, volume for 2007 remains unchanged and future years have been bolstered by the strong outlook in emerging markets as well as further growth potential driven by new product designs and digital convergence.

"We believe consumer notebooks will continue to drive strong overall PC sales through the rest of this year despite the presence of many potential competitors for discretionary income this holiday season, such as flat-panel TVs," said Bob O'Donnell, vice president Clients and Displays. "Looking forward, we expect desktop shipments will begin to stabilize, particularly in the enterprise segment. However, consumer notebook adoption will fuel industry growth and move us closer to the day when notebooks will out-ship desktop PCs."