Arik Hesseldahl

Recent Posts by Arik Hesseldahl

IDC Says PC Shipments Are Slowing Down Again

The market research firm IDC is out with its latest forecast on PC sales growth in 2011, and as has been the case so many times before, the predictions are worsening for the year.

The firm has cut its growth estimate on PC sales in 2011 almost in half. In February, it said PC shipments would grow more than 7 percent. Now it says shipments will grow by only a little more than 4 percent. The reasons are a combination of things you can probably guess: A tightening economic outlook, a saturation in developed markets, and, well, the iPad. IDC uses the phrase “competing products,” but we all know that the competing product of the moment is tablets, and when you talk tablets, you’re talking about Apple’s iPad. Even so, IDC says 2011 will be a down year compared to 2012 through 2015, when growth is expected to head north of 10 percent.

The 2009 consumer-driven boom cycle in notebooks and mini-notebooks has faded. And shipments in the first quarter of 2011 declined by more than 4 percent versus the same period a year ago. That drop was only offset a little by a 3 percent growth in shipments to companies. The consumer slowdown was worst in the U.S., Canada and Europe, IDC says. Add to that the Japanese earthquake, the Arab Spring, and a dour economics outlook, and you end up with a market that’s going to grow a lot slower than previously expected.

As we’ve seen, these forecasts initially tend to impact the share prices of companies in the PC ecosystem like Intel, Advanced Micro Devices, hard drive makers like Seagate, not to mention the PC makers themselves like Hewlett-Packard and Dell. But remember what happened when Intel last reported its quarterly earnings. CEO Paul Otellini slapped down the market research firms in comments made on a conference call with analysts.

At the time, he said, “Our views differ from the views of the analysts,” and that, “Our projection for 2011 remains in the low double-digit range.” If you see Intel cutting its estimates ahead of its next earnings call–and there’s no evidence of that happening–you know it’s getting serious.

Update:An Intel spokeswoman says the company is standing by the forecast it gave in the second quarter. For the record the company said last month that it expects PC unit shipments to grow 11 percent this year notwithstanding any impact from tablet sales. It also said it expects revenue to be flat in the second quarter versus the first quarter, which would be an improvement over the usual decline the company sees at this time of year. I talked briefly with Intel about this today, but Don Clark at The Wall Street Journal has more on it.

Clearly it still sees a different market than IDC does, and wants the market to know it. We’ll see how it all turns out soon, as the second quarter comes to a close in about three weeks.


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