14 DAY TRIAL // The global economy and financial system are undergoing rapid deterioration these days, driving some of the major market research firms to reconsider their previous IT industry forecast for the upcoming year. iSuppli announced having lowered its PC outlook for 2009, reducing the expected growth rate from the initial 11.9 percent to a new 4.3 percent. Moreover, the firm says that, while improving in 2010, the market will still remain lower than previous expectations.
The lowering of estimated growth to 4.3 percent translates into a nearly two-third reduction of the forecast, which is somehow backed by the global economy that has changed dramatically “and in many ways irrevocably”. According to iSuppli analyst Matthew Wilkins, the banking collapse has affected large corporations, small businesses and people on the street, and has also had a great impact on the availability of credits.
“The result of the financial turmoil is less money to spend, and often that money is itself more expensive,” Wilkins said. “With less money to spend, application markets, like PCs, have been impacted.” The PC market has consistently posted growth rates of more than 10% over the recent five years, but 2008 may already be different.
“Real issues - such as difficulties in paying staff, or making rising mortgage payments - are affecting businesses as well as consumers,” Wilkins said. “In light of such financial issues, the task of refreshing or acquiring new IT equipment has taken a back seat.”
The research firm said that shipments of desktop PCs were expected to decline by about 5 percent during 2009, while notebook PCs would see a 15 percent growth. Currently, the notebook market has a strong momentum and is doing quite well, which drives to the conclusion that it would remain so during the following year as well. Moreover, the market has seen a great boost in the netbook segment lately, which features rather attractive pricing. According to iSuppli, netbook demand will not decline during 2009, the same as it would for other notebook platforms, and that their lower average selling prices will also contribute to that.
When talking about 2010, iSuppli says that unit shipments are expected to grow 7.1 percent, a lower forecast than the previous expectation of 9.4 percent. The fact that desktop PC shipments are declining is not too much of a surprise, since notebooks have been driving the market for quite a while now. Even so, according to Jack Gold from J. Gold Assocatiates, the traditional notebook market might be in trouble, too. He says that “laptop deployments will slow dramatically” amid a fast adoption of smart phone devices.
It seems that over the next three years, smart phones are expected to see a 400% increase compared to notebooks, while also registering business applications deployed on a rate exceeding two times that of applications for notebooks. The outlook is based on a survey including more than 340 large and small companies in North America and Western Europe, said Gold.