IDC has lowered its forecast for PC sales growth, citing a slower than expected economic recovery and the spread of severe acute respiratory syndrome (SARS) in Asia.
The company now expects PC shipments to grow 6.3 per cent to 145.2 million units worldwide in 2003, down from the 6.9 per cent growth predicted in March. That number had itself been downgraded from last December's expectations of 8.3 per cent growth.
"We are seeing a recovery now, it's just not a very robust recovery," said Roger Kay, IDC vice president of client computing.
PC shipments to consumers in the US are expected to grow 10.8 per cent in 2003, compared to growth of 6.5 per cent worldwide. However, IDC sees stronger corporate demand for PCs worldwide during the rest of 2003, with growth of 6.2 per cent expected, as compared to corporate shipment growth of 2.3 per cent in the US.
Upgrade cycle The corporate growth comes from the long-awaited PC upgrade cycle that corporations have been putting off amid budget concerns. In the 1990s, conventional wisdom held that corporations upgraded their PC infrastructure every three years, as processor and component technology improvements increased productivity. However, the last major PC upgrade cycle came during the preparation for the Y2K bug, and many businesses have been making do with PCs purchased in 1999 or 2000.
"There's a small number of good reasons not to upgrade: It costs money, and the PCs you've got now work pretty well," Kay said. But concerns such as increasing worker productivity and rising maintenance costs are mounting as companies realize they can't make their older PCs last forever, he said.
Worldwide, unit shipments are expected to regain the losses suffered since the economic downturn began in 2000. In 2000, 140.1 million units were shipped, according to IDC, falling to a low of 134.6 million in 2001.
The effect of SARS in China appears to be easing, but it was responsible for holding down consumer purchases as people stayed home, Kay said. One side effect of the outbreak is a move toward direct Internet PC purchases in China away from retail purchases, he said.
Shipments to businesses in western Europe are expected to grow 3.9 per cent, up from flat growth in the fourth quarter of 2002, IDC said. But in Japan, a weak consumer market for PCs is expected to result in a 1.2 per cent decline.
While unit shipment growth regains some momentum, revenue is expected to decline in 2003, Kay said. The total shipment value of PCs will decrease 2.4 per cent in 2003 as the average selling price of a PC continues to fall, he said.