PC Makers Bracing for Back-to-Cruel Season
PC vendors hoping for a sooner-than-expected recovery later this year best prepare themselves for disappointment. No quick recovery is likely, according to J.P. Morgan analyst Mark Moskowitz, who says the PC market will remain in a shambles throughout 2009. He expects PC unit sales to decline 9.9 percent for the year and revenue for the industry to fall by more than 21 percent from 2008.
“We are preparing for a [second-half] letdown in PCs,” Moskowitz wrote in a research note to clients. “While our revised unit growth estimates are edging up, our draconian revenue outlook remains unchanged. We continue to model sub-seasonal sequential trends for the second half of the year.” Demand, he adds, will continue to be slow, and the coming launch of Microsoft’s (MSFT) Windows 7 OS will be no panacea. “So far in the June quarter, our conversations with industry contacts suggest that PC end demand remains soft, and there are increasing concerns of another inventory correction across the food chain if suppliers continue to target normal seasonality in the second half of the year….We have not seen a major PC upgrade cycle related to an operating system launch since 1995, and we do not expect anything different with Windows 7.”
Back in March Gartner predicted that the PC industry would see its sharpest unit decline in history in 2009. Sadly, Moskowitz’s note would seem to bear that out.