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Electronics Production | November 21, 2008

Credit turmoil cuts 2009 PC Outlook<br> by nearly 2/3

Amid rapidly deteriorating conditions in the global economy and financial system, iSuppli Corp. has slashed its 2009 forecast for PC unit shipments by nearly two thirds.
iSuppli’s new preliminary forecast predicts global PC shipments will rise by only 4.3% in 2009, down from its previous forecast of 11.9% growth. The new forecast for 2010 calls for a 7.1% growth in unit shipments, down from the previous outlook of a 9.4% expansion.

“Since iSuppli published its last worldwide PC forecast, the landscape of the global economy has changed dramatically, and in many ways irrevocably,” said Matthew Wilkins, principal analyst, compute platforms, for iSuppli.

Wilkins noted that established, revered banking institutions have crumbled and disappeared, with many requiring government aid to survive. The magnitude of the banking collapse has been so great that its impact on the availability of credit—and interest rates—has affected large corporations, small businesses and even the man on the street.

“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 attached figure presents iSuppli's preliminary revised forecast versus its previous outlook for PC unit shipment percentage growth in 2009 and 2010.



Staying afloat
The PC market has been a buoyant end-application market for a long time, reporting annual growth rates around the 10% mark for the past five years—with 2008 becoming the sixth year, due to 13% growth expected. But in light of the credit collapse that hit during the third quarter of 2008, prospects for the PC market in 2009 are not as positive as in previous years.

“Real issues—such as difficulties in paying staff, or making rising mortgage payments—rare 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.”

Notebooks still going strong
iSuppli believes that desktop PCs in 2009 will suffer a shipment decline of approximately 5%, while notebook PCs will achieve growth of about 15%. The forecast of growth in notebook shipments arises from the fact that the segment is currently performing very well and has strong momentum—not to mention the very attractive pricing for low-cost notebooks, known as netbooks. iSuppli believes demand for netbooks—which are included in its preliminary revised forecast--will show less of a reduction in 2009 than other notebook platforms, primarily due to their lower average selling prices.

Image Source: Apple

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