(Richard Holway 8.00am 5th March 09) Researcher, Gartner, issued revised forecasts for PC sales earlier in the week. They got widespread coverage – eg PC sales, except netbooks, to slump in 2009 (The Register) – so I won’t repeat them here. But the decline – minus 12% - is the “sharpest unit decline in history”. Previously, rough times in the developed economies have been offset by good growth in the BRICs. Not anymore. We are all suffering now. On top of that the very dynamics of the industry are changing with extreme speed. Desktop PC sales are falling off a cliff – forecast to be down 32% in 2009. The only place to be is netbooks (but if you are surprised at that you really haven’t been reading UKHotViews for the last two years!). Gartner forecasts a 80% rise in Netbook sales and reckons they will represent 8% of the total market. (Worth saying that many other forecasters see Netbooks taking an even higher share than this) That means that sales of other laptops/notebooks will be pretty flat.
All Gartner’s figures are for unit sales. The real carnage comes when you also realise that unit prices are also falling like a stone – even Gartner reckons the buoyant netbook sector will experience unit price falls of over 10%. That’s the rub. If you are a conventional PC supplier – like Dell – moving to netbooks is not the solution as profit margins plunge and netbooks cannibalise existing, higher value sales. But not moving, just means that your competitors do all that for you and eat you breakfast, lunch and dinner whilst they are at it.
Tough times. Many hardware suppliers are looking to services as a solution. But it’s a really tough move and, frankly, if you are not far down the route already (like IBM and HP/EDS) you don’t now stand much of a chance.
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