IDC bumps up PC sales estimates for '05

Consumers and developing countries fuel growth

The outlook is good for the PC market, with the market expected to stay strong in 2005 and long-term growth expected to remain stable at nine per cent.

Following strong international demand that led to increased growth in the second quarter, total PC shipments for the second half of 2005 are expected to reach almost 110 million units. According to IDC, the market is expected to grow 12.9 per cent for the period, a revised figure from May's prediction of 10.4 per cent.

Consumers in Western Europe, Central and Eastern Europe, Middle East and Africa, Latin America, and Canada will drive growth throughout the market, with portable PCs playing an important part.

If the second half of the year lives up to its expectations, total shipments for 2005 will reach 204.6 million, with growth of 14.1 per cent. This is below the 15.3 percent growth seen in 2004, but is an improvement on May's 11.4 per cent prediction for the year.

However, total shipment value for 2005 is only expected to increase by 5.8 per cent to $211.6bn. This is a trend that will continue in the coming years, with shipments to grow by nine per cent between 2006 and 2008, slowing to 8.3 per cent in 2009. Growth of shipment value is also expected to slow.

"We continue to see remarkable growth in the consumer segment and in emerging markets," said Loren Loverde, director of IDC's Worldwide Quarterly PC Tracker. "Low prices combined with low penetration, recovering or growing economies, and general investment in technology continue to fuel rapid growth in these markets."

Fortunes vary throughout the regions. In the US, rising oil prices and a downward trend in growth are impacting on the PC market. Growth is expected to decline to mid-single digits by the end of the year. However, the damage to the market caused by falling consumer confidence and hurricane Katrina, the effect on PC shipments is expected to be relatively short-term; according to IDC, growth will remain in mid to high single-digits throughout the forecast.

Despite a weakening euro and the end of a replacement cycle in Western Europe, the research firm expects solid growth in the region to continue through the remainder of 2005. Growth is expected to remain above 15 per cent for 2005, slowing in 2006.

Japan has experienced rising momentum in the consumer segment and growth in the business sector, leading to an improving outlook in the market. Growth in the consumer segment has enabled the Japanese market to boost its outlook for growth in 2005 to high single digits, exceeding the US.

Consumer and portable PC sales are seeing an increase in Asia Pacific, with consumer growth expected to drive the market through the end of the year, before the commercial segment comes to the fore. Unlike other regions, growth in Asia Pacific is expected to remain at about 12 per cent from 2006 to the end of IDC's forecast.

IDC predictions tally with a recent report by research firm Gartner, which said that global PC shipments will total 206.6 million by the end of the year. It also expected PC revenue to grow at a slower rate thanks to declining average selling prices, growing by just 0.5 per cent to $202.7bn.

Gartner also predicted that replacement would begin to wane this year, after driving growth for the past two years. It said home replacement activity would reach its peak early in 2006, leading to a subsequent decline in PC demand in 2006.

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