IDC: PC slump to last until 2003

Market research company IDC takes a more pessimistic view of PC market growth after seeing worse-than-expected figures for second-quarter shipments. IDC's forecast? No turnaround until 2003.
Written by John G. Spooner, Contributor on
IDC has yet to release its final second-quarter figures for PC shipments, but the market researcher is already offering a more dire prediction for market growth.

When IDC released its preliminary second-quarter numbers last month, it had forecast a slight increase in the fourth quarter of this year and a turnaround beginning in the first half of 2002.

Now, the second-quarter data looks worse than previously expected. As a result, IDC will lower its PC market forecast and extend its expectations for a decline in the US and European markets somewhat further into 2002.

The company is now predicting that sizable recoveries of key markets, including the United States, will not occur until 2003, though a small amount of growth is still expected for 2002. Troubles in Japan may last longer.

"We're lowering our forecast because the consumer market and the economies around the world are still weak," said Loren Loverde, director of IDC's Worldwide PC Tracker Service.

Not all regions will recover at the same pace, he added.

"It's different for different regions. For some, we're looking at a more substantial recovery in 2003," he said.

At the moment, IDC is still finalizing the second-quarter figures and expects to release them by month's end. But several areas are cause for concern.

These include the worldwide consumer PC market and the Japanese PC market. Forecasts for the US and European markets will also be slightly lower than the earlier forecasts.

In a word, the US market next year will likely be "slow", Loverde said.

Of more major concern is Japan. The country's PC shipments fell off dramatically in the second quarter, causing IDC to lower expectations for Asia as a whole.

"The (Japanese) market was much softer than we expected," Loverde said.

Meanwhile, weaker-than-expected consumer PC shipments indicate that the rate at which people are buying their next computer is slowing, at least while economic uncertainty persists in many countries, Loverde said.

"Given the economic environment, people are postponing purchases," he said.

Meanwhile, the release this fall of Microsoft's Windows XP operating system might not provide as much of a boost as some have been expecting.

"We're uncertain that Windows XP will notably accelerate the market, based on the economy," he said. "We're skeptical that it will provide that much kick for the market."

This is not to say that there won't be some growth in the PC market in the second half of this year, Loverde said. It's just that his company does not consider a relatively small amount of growth to be a recovery.

"We do expect some sequential growth," Loverde said. "But if you compare it to a year ago, especially in the US, it's going to be negative."

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