Gartner: PC sales to see worst fall in history
Summary
Shipments of new PCs are set to fall by 11.9 percent this year in the industry's 'sharpest unit decline in history', analysts at Gartner have predicted.
Topics
The global PC industry will suffer its 'sharpest decline in history' in 2009, as overall demand for PCs falls by 11.9 percent compared with 2008, according to analysts at Gartner.
The new low beats the previous record decline of just 3.2 percent, which took place in 2001. According to a statement from Gartner, both emerging and mature markets are forecast "to suffer unprecedented market slowdowns".
The worst previously recorded performance in emerging market PC sales was growth of 11.1 percent in 2002, but in 2009 they will see contraction of 10.4 percent. Mature market sales had a record fall of 7.9 percent in 2001, but this year they will fall by 13 percent, Gartner said.
One relatively bright spot has been the success of netbooks, which are forecast to total 21 million units in 2009 — almost double the 2008 figure of 11.7 million. Netbooks will "cushion the overall PC market slowdown, but they remain too few to prevent the market's steep decline," the Gartner report said.
Netbooks are forecast to represent eight percent of PC shipments in 2009.
Gartner senior analyst Angela McIntyre said in a statement that "mature markets continue to be the primary consumers of [netbooks] but as prices continue to fall, they are likely to attract increasing numbers of emerging market buyers".
All PC suppliers will struggle over the coming months, said Gartner senior analyst Ranjit Atwal. "It will come down to... how exposed they are and in which markets," he said.
"If you look at HP, they look in better shape than some because they are spread between the home and the business markets," Atwal told ZDNet UK on Monday. "But if you look at Dell, they have a big dependency on certain markets and particularly the UK market."
Atwal said particular manufacturers' responses to the decline depended on their relative exposure to the PC market. "Some of them like Toshiba, Sony and others are not dependent on the PC market," he pointed out. "They have the option, and I am not saying they would, just to get out if it is not worthwhile anymore."
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OEMs will be driving hard bargains with MS.
Pay less for the OS? it is so invisible in the end cost of a system (35 dollars?) that no one notices.
Look at the overall price difference between a Windows machine and a Linux machine from Dell or HP and you can see why the vast majority purchase the Windows machine:
35 dollars for a machine guaranteed to work as expected is a bargin in today's economy.
People are NOT willing to be stuck with an underperforming machine to save 35 dollars these days, the choices are made much more carefully.
Look at the overall price difference between a Windows machine and a Linux machine from Dell or HP and you can see why the vast majority purchase the Windows machine:
35 dollars for a machine guaranteed to work as expected is a bargin in today's economy.
People are NOT willing to be stuck with an underperforming machine to save 35 dollars these days, the choices are made much more carefully.
Even cheaper 
pop on normal computers right now.
The pressure to give away XP on netbooks will also move into other categories, but, MS will be forced to give away Windows 7 too.
The pressure to give away XP on netbooks will also move into other categories, but, MS will be forced to give away Windows 7 too.
support Windows NOT Microsoft.
But, in any case, MS was forced to cut the price of XP to the bone to compete on Netbooks, and Linux still has over 10% of the market compared to 1% in normal computers and Laptops. Even with MS almost giving away XP.
That same pressure is going to be felt outside the netbook market too.
OEMs will be able to demand and get some big discounts on Windows 7.
And, let us not forget that XP, Vista, and Windows 7 will NOT run on Arm based netbooks. That will send Microsoft scrambling yet again.
But, in any case, MS was forced to cut the price of XP to the bone to compete on Netbooks, and Linux still has over 10% of the market compared to 1% in normal computers and Laptops. Even with MS almost giving away XP.
That same pressure is going to be felt outside the netbook market too.
OEMs will be able to demand and get some big discounts on Windows 7.
And, let us not forget that XP, Vista, and Windows 7 will NOT run on Arm based netbooks. That will send Microsoft scrambling yet again.
Little companies you might not have heard of such as HP, Sony, Dell. You know, the big guys who don't actually supply a DVD with the box
But we so called "White Box" resellers and OEMs (who ACTUALLY sell more PCs) have to pay around $140 for our OEM copies to sell along with the computers we build. Well, at least our customers actually get a copy of the OS they can use if/when they need to reinstall something.
Terry Thomas
President
PC Tech
Atlanta, Georgia USA
But we so called "White Box" resellers and OEMs (who ACTUALLY sell more PCs) have to pay around $140 for our OEM copies to sell along with the computers we build. Well, at least our customers actually get a copy of the OS they can use if/when they need to reinstall something.
Terry Thomas
President
PC Tech
Atlanta, Georgia USA
less than the cost of return/restock,
less than the cost of one support call.
as far as 10% of netbooks there's a reason for that. MS didn't have XP ready in time. Linux started with 100% and has now returned to the level you'd expect. 1% using it, 9% replacing it with pirated windows...
If ARM ever becomes a factor MS will just load up their ARM compiler. Windows has a very nicely abstracted HAL...
less than the cost of one support call.
as far as 10% of netbooks there's a reason for that. MS didn't have XP ready in time. Linux started with 100% and has now returned to the level you'd expect. 1% using it, 9% replacing it with pirated windows...
If ARM ever becomes a factor MS will just load up their ARM compiler. Windows has a very nicely abstracted HAL...
Local computer recycling shops around here supply PCs with ubuntu. I guess you're saying their business model can't work, except the shops are still doing well, whereas the high street stores selling Windows PCs are empty and in trouble..
Maybe my experience is too anecdotal, but I wouldn't be surprised if this was a pattern emerging.
After all, people use the browser such a lot now, and specifically Firefox. What other apps matter?
(ok to me openoffice matters, but without the work I have to do, it's pretty much the browser is the OS).
Maybe my experience is too anecdotal, but I wouldn't be surprised if this was a pattern emerging.
After all, people use the browser such a lot now, and specifically Firefox. What other apps matter?
(ok to me openoffice matters, but without the work I have to do, it's pretty much the browser is the OS).
Oh no. Nobody steals from Microsoft. They use the software with Microsoft's blessing. They could shut them down anytime but why get everybody angry and thinking about using Open Source products. Besides they're making a ton of money making 20% of their customers pay everybody's share. How does it feel to know that you're paying Microsoft for some guy's copy of Vista in China?
If you get a cheap (often high spec) OS-less PC from one of the corporations shutting down (eg: banks), then often a vista licence is the same price as the PC.
People should try Ubuntu first to see how they get on.
If it works for them, hey they saved $140.
People should try Ubuntu first to see how they get on.
If it works for them, hey they saved $140.
Along those lines, people could do a lot worse than run ubuntu 8.10. This product line just keeps getting better. I buy ubuntu merchandise & DVDs to give them a business model. Very very cool.
PC manufacturers may have to roll out the Windows 7 upgrade coupons early. Who wants Vista?
What about the time Adam Osborne pre-announced the "Osborne II" (which was not close to being ready for production). Sales of his "Osborne I" slowed something like 95%. His company died as a result.
What about when IBM introduced their original IBM PC at Comdex in Atlanta? Sales of all other PCs went into a tailspin. I've forgotten the percentage. But NONE of those companies exist any more. 100% GONE! Now, that's a decline to be remembered.
Did Gartner really do any research on the PC industry before throwing out catch phrases such as that?
Geez...
Terry Thomas
President
PC Tech
Atlanta, Georgia USA
What about when IBM introduced their original IBM PC at Comdex in Atlanta? Sales of all other PCs went into a tailspin. I've forgotten the percentage. But NONE of those companies exist any more. 100% GONE! Now, that's a decline to be remembered.
Did Gartner really do any research on the PC industry before throwing out catch phrases such as that?
Geez...
Terry Thomas
President
PC Tech
Atlanta, Georgia USA
Just because a company goes under does not mean that it was representative of the overall market.
The IBM PC might have crushed the competition, but it did it by making the market bigger.
The IBM PC might have crushed the competition, but it did it by making the market bigger.
I have to wonder how much of the sales drop can be attributed to market saturation. In proportion to the entire computer market, there probably aren't many first-time buyers left and upgrading provides a smaller incremental improvement in performance with each generation of hardware.
Computers have been both fast and cheap for some time and perhaps most of the people or businesses who want to buy or upgrade have already done so.
Computers have been both fast and cheap for some time and perhaps most of the people or businesses who want to buy or upgrade have already done so.
then a new PC isn't necessarily something you feel you're going to be needing.
The depression is still getting worse, jobs are still burning up, and no-one knows if it will be them next.
The depression is still getting worse, jobs are still burning up, and no-one knows if it will be them next.
It's possible many are finding their 2.6GHz quad core they bought
last year is plenty fast enough for email, wordprocessing and
facebook.
last year is plenty fast enough for email, wordprocessing and
facebook.
Given that we haven't yet seen the worst of the economic decline, such a forecast should be expected. I suspect, though, that it may end up being far worse if things worsen on the job front. There isn't much incentive for upgrading hardware when global business is in a slump and access to credit continues to diminish for both consumer and retailer. As businesses cut jobs, they can end up with redundant, or excess hardware, which makes upgrading even less appealing. As consumers lose jobs, everyone's credit takes a hit as creditors begin to take steps to secure their profitability - to the detriment of the average consumer who still has their job.
Some manufacturers will be hit harder than others - the more dependent they are on the US market, the greater the hit. It will be interesting to see how Apple stocks fare in this type of economic environment, given their heavy dependence on the US market when compared to the larger manufacturers. Apple does have billions in the bank, but that money will disappear quickly if Apple starts making losses. Just one failed product launch could do it.
Some manufacturers will be hit harder than others - the more dependent they are on the US market, the greater the hit. It will be interesting to see how Apple stocks fare in this type of economic environment, given their heavy dependence on the US market when compared to the larger manufacturers. Apple does have billions in the bank, but that money will disappear quickly if Apple starts making losses. Just one failed product launch could do it.
quickly. I tend to doubt it. Also don't forget Apple has multiple revenue
sources like the iPhone contracts and such. Apple also has the best
margins in the industry so Apple has flexibility that others simply do not
have. It just might prove too be depending on unknown factors such as
how efficient Apple is running and continues to run in the near future
that Apple emerges far stronger than others from this economic crisis.
That said I tend to doubt even with the unknowns that a single product
failure will bring Apple down.
Pagan jim
sources like the iPhone contracts and such. Apple also has the best
margins in the industry so Apple has flexibility that others simply do not
have. It just might prove too be depending on unknown factors such as
how efficient Apple is running and continues to run in the near future
that Apple emerges far stronger than others from this economic crisis.
That said I tend to doubt even with the unknowns that a single product
failure will bring Apple down.
Pagan jim
They may have declined even if the economy didnt tank. Any dual core computer with 2 gigs of ram will still have plenty of power for most consumer needs.
I wonder if they took into account all the layoffs? Most larger companies are up to their elbows in spare hardware and perpetual right to use OS liceneses.
Why buy new? They have so many now they can simply dispose of broken units and replace it with a spare?
Why buy new? They have so many now they can simply dispose of broken units and replace it with a spare?
PC sales are falling because OEMs are trying to put linux on them but people don't want linux, thus no sale.
Well, LD's no Mikey, that's for sure. But his sarcastic humor is appreciated, just the same.
A lot of people have discovered they can just reformat the drive on a two-year-old PC, put an up-to-date version of Linux on it, and run it until the economy gets better and MS comes out with an OS worth buying on NEW hardware.
Why just the other day I drove by a WalMart and there were about 50 people out front carrying signs and chanting "NO MORE LINUX, NO MORE LINUX".
Get it FORWARD....Microsoft is BACKWARD....EOS!
Guess folks have determined that Microsoft just plain SUCKS! BIG TIME! (AKA Troll post!)
Buy Apple....stay good for 10 years!
Buy Apple....stay good for 10 years!
i think pc sales will pick up on the up coming years.
Best HP Laptops.
i think dell is the company to look for in this regards.
Best HP Laptops.
i think dell is the company to look for in this regards.
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