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Gartner predicts UK PC market nosedive for 2011

Rest of world to go on grow-slow, Blighty stuffed

Exclusive The UK PC channel is stuffed for 2011: both in terms of unsold kit and weakened demand across all market segments, according to Gartner.

The beancounter today slashed worldwide PC sales projections for this year and next, cutting 2011 forecasts to 3.8 per cent growth from previous estimates of 9.3 per cent and down a couple of points for 2012 to 10.9 per cent.

But the outlook for the UK is markedly worse, the analyst says, with sales into the channel set to collapse by 14 per cent this year down from the 5 per cent growth that had been predicted, with shipments rising 9 per cent next year.

"The number of UK channel partners selling PCs is shrinking; even those that are dedicated to selling them are taking on fewer SKUs, so the amount of inventory required by dealers is reflected in the re-forecast," said research director Ranjit Atwal.

"Consumers and businesses are not attracted to replacing PCs anytime soon, and that is a damning indictment of the PCs industry's failure to look beyond the previous growth phase into how it can stimulate demand beyond price cutting," he told El Reg.

Sales into retailers are expected to be down by one-fifth this year with the inventory glut shifting at a snail's pace, and the business space is forecast to shrink by up to four per cent as the corporate replacement cycle continues but at a slower rate than is traditional.

"The historical method of using price to push inventory out of the door isn't working as PCs are already cheap enough and knocking $50 off the price of a box on longer helps," said Atwal.

Gartner reckons the UK market will pick up next year, albeit in the second half when ultrabook prices fall and Windows 8 debuts, providing users with "some incentive to replace machines".

Globally, the market watcher says that Western Europe and the US are dragging down overall shipments, with excess inventory on this side of the pond, weaker than expected Back2School sales over the Atlantic and economic woes in each region dampening demand from consumer and commercial organisations.

Pesky fondleslabs have also "dramatically" altered the dynamics of the traditional PC arena, pulling the rug from under most major players, said George Shiffler, Gartner research director.

"Vendors' tried and true business models are failing as traditional PC functionality is extended to other devices, and users continue to lengthen PC lifetimes. Vendors only seem to be flailing as they look for quick fixes to their problems.

"Unfortunately, the resulting chaos is just creating more confusion across the entire supply chain, impacting sell-in," said Shiffler. ®

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