Despite computer makers' best efforts to entice business and consumer spenders with sleek new hardware, upgraded operating systems and bundled software packages, growth forecasts for the worldwide PC market have been slashed again, according to research firm IDC's most recent study.
IDC cut its worldwide PC buying forecast for consumer and business sectors for the remainder of 2002 to a meager 1.1 percent, down from the company's original 4.7 percent forecast earlier this year. The new growth rate equates to a total forecast of 135.5 million shipments in 2002.
The firm also predicted an 8.4 percent growth rate for 2003, for a total of 147 million shipments, but even that relatively positive forecast was down from IDC's initial 11.1 percent growth prediction.
Big Biz Slow To Buy
The Framingham, Massachusetts-based firm blamed the reduced forecasts on continuing reluctance by mid-size and large businesses to invest heavily in new PCs, particularly in the United States and Europe.
The firm noted that consumer and small business spending has continued to float the fragile market. But even in that segment, which IDC said accounts for nearly one-third of the overall market, enthusiasm for new computers is weakening.
"Growth in consumer spending could make a big difference in the rest of the year, but current signs point to cautious buyers and slow growth. We don't expect to see a significant recovery until both consumer and business demand pick up, and we may reach the middle of next year before that happens," said Loren Loverde, director of IDC's Worldwide Quarterly PC Tracker.
The new figures compare with PC growth rates in the United States of 21.8 percent in 1999 and 6.9 percent in 2000. Conversely, the industry took its toughest hit in the United States last year as the market shrank 11.4 percent.
This year, according to IDC, the United States will see 0.5 percent growth across all PC segments, with the consumer segment growing by 1.2 percent and the commercial sector by 0.1 percent.
Weak Holiday Spending
"Consumer spending is the most volatile of all the segments," Roger Kay, director of client computing at IDC, told the E-Commerce Times. "Consumer demand is like smoke: It can blow away at the least wind."
Kay noted that while seasonal holiday PC spending in 2002 is set to experience "double-digit growth" compared with the first half of this year, that increase will be offset by "very poor performance before that."
The fading hope that holiday spending could boost PC revenue was echoed by others.
"I don't see a big Christmastime boom," Forrester research director Carl Howe told the E-Commerce Times. He added that Forrester's PC forecasts for the remainder of 2002 are for flat to slight growth, and that at the moment, "there's not enough compelling stuff out there" to entice consumers to make a purchase.
However, he said, he believes consumer electronics products and peripherals stand a better chance to perform well in the holiday season as consumers shop for devices that can add value and enhance their PC experience.
Worldwide Recovery Slow
Western Europe suffered a similar PC market slump in both commercial and consumer sectors during the first half of this year, though IDC has predicted a gradual recovery in the corporate space by the end of 2002.
PC sales in Japan have been at anticipated levels, while countries in the
Asia-Pacific region are expected to see continued growth. The report
highlighted sales in China, Australia and India, which are expected
to push the region's growth rate to 10 percent by the close of this year.
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