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June 6, 2011

PC Sales in 2011 To Grow by 4%, Long term Growth expected

Source: IDC Worldwide Quarterly PC Tracker, May 2011
* Forecast data

  • Mature Markets includes U.S., Western Europe, Japan, and Canada.
  • Emerging Markets includes Asia/Pacific (excluding Japan), Latin America, Central and Eastern Africa, Middle East and Africa.

Research firm IDC slashed its PC forecast for 2011 on Monday, which will likely have implications for Microsoft's software business. .IDC  expects global shipments of PCs to grow 4.2 percent in 2011. In February, IDC had predicted growth of 7.1 percent in 2011.,First quarter 2011 PC shipments were down 1.1% from the prior year, with a decline of 4.4% in consumer shipments

Consumer PC purchases have been a cornerstone of PC growth over the past five years. During this time, a transition to low-cost portables helped drive purchases by new users in emerging markets as well as replacement and secondary systems in more mature markets. Consumer PC shipment growth averaged 18.9% from 2005 to 2007, almost 7% faster than commercial shipments. During 2008 and into 2009.

Consumer growth was actually faster at more than 21% while commercial growth fell below 3% in 2008 and then dropped to -10.5% during the recession in 2009.

The potential boost to the PC market from thinner designs, longer battery life, instant on, touch, and other improvements will likely not be widely available until 2012.
The decline in consumer shipments  in  2011 was particularly acute in mature regions, with double-digit declines in Western Europe, the U.S., and Canada.Disruptions  caused by  Japan earthquake and nuclear disaster, the Arab Spring, and reduced economic projections (including government stimulus) will keep overall growth in single digits the rest of 2011.
Netbooks now have competition from lower-priced laptops and tablets, IDC said. The report gave these 2010 shipment numbers: 31 million laptops; 17.9 million netbooks; 1.3 million netbooks.However IDC  is not yet ready to   accept that "The PC is Now Over" as many  experts, who have been studying the PC market very closely .New designs, chips, operating systems, features, and services, along with falling prices will continue to make PCs more powerful, affordable, and function, explains IDC.

 This comes at a time when Morgan Stanley too predicted recently  that Tablets do not necessarily replace other technology purchases.Many consumers view tablets as an incremental device which is a bullish indicator for the broader technology landscap . Fifty-five percent of potential tablet users do not expect a tablet to replace the purchase of another technology product, indicating an expansion in the market size of mobile devices that should benefit tablet vendors, component suppliers, and content providers alike. 

"Consumers are recognizing the value of owning and using multiple intelligent devices and because they already own PCs, they're now adding smart phones, media tablets, and eReaders to their device collections," said Bob O'Donnell, IDC vice president in the report. "And this has shifted the technology share of wallet onto other connected devices."