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Market research firm IDC recently indicated that in spite of strong fourth quarter of 2004, the year 2005 is unlikely to be as prosperous as the previous for growth in sales of personal computers. Nevertheless, longer term PC shipments outlook remains strong due to adoption of notebooks, developing countries and dawn of new replacement cycle.

IDC Predicts 9.7% PC Market Growth in 2005

The updated forecast from IDC’s Worldwide Quarterly PC Tracker lowers growth in total worldwide PC shipments for 2005 from 10.1% in the November release to 9.7% as a consequence of delayed recovery in Japan and a cautious outlook in the United States, IDC said

The good news is that demand is likely to shift into later years and the growth forecast remains above 8% through the end of 2009. Total shipments are expected to reach 195.4 million in 2005 on growth of 9.7% with total shipment value growing by 5.3% to $209 billion. Shipments are projected to reach 273 million in 2009 with a value of $245 billion.

U.S. Market Weaker Than Expected, Claims IDC

“Despite fears of slowing growth, particularly in the U.S. consumer segment, the PC market was fairly robust in the fourth quarter of 2004 with strong demand in the consumer and business segments,” said Loren Loverde, director of IDC’s Worldwide Quarterly PC Tracker.

“While overall growth in 2005 will be slower than 2004, we expect to see continued strength in portables and in emerging markets. Although worldwide growth will slip into single-digits this year, long-term drivers such as mobile adoption, replacement of older systems, and growing penetration will support healthy growth through the end of the decade,” Mr. Loverde added.

“While IT buyers in the United States have indicated firm intentions to buy in 2005, we have kept the U.S. forecast modest because of what we see as a host of risk factors,” added Roger Kay, vice president of Client Computing at IDC. “These factors include a recovery that appears to be getting long in the tooth, a lack of jobs growth, rising budget and trade deficits, persistently high oil prices, a treasury-draining foreign war, rising interest rates, a stock market that continues to move sideways, and record-low household savings rates.”

U.S. and Worldwide PC Shipments and Growth, 2002-2006

IDC's PC and Worldwide PC Shipments Data and Forecasts 2002 - 2006

Region

2002

2003

2004

2005

2006

USA Units (million)
Consumer17.120.021.823.425.6
Commercial30.532.736.539.342.2
Total47.652.758.362.767.7
Worldwide Units (million)
Consumer49.856.664.269.975.9
Commercial88.498.2113.9125.5136.3
Total138.2154.8178.1195.4212.2
USA Growth (%)
Consumer-17.3%8.9%7.6%9.0%
Commercial-7.2%11.7%7.6%7.4%
Total-10.8%10.6%7.6%8%
Worldwide Growth (%)
Consumer-13.6%13.5%<8.8%8.7%
Commercial-11.2%15.9%10.2%8.6%
Total-12.0%15%<9.7%8.6%

Regional Outlook

  • United States – Following a second year of nearly 11% growth, the U.S. market is expected to slow to 7.6% growth in 2005. Consumer growth may fall to low single digits in the first quarter of 2005 but full-year growth should top 7%. Business growth will lead the market while the public sector is expected to trail other segments.
  • Western Europe – Adoption of portable PCs continues to fuel growth in Western Europe. Growth in portable PC shipments should top 20% in 2005 following over 30% growth in 2004 and nearly 40% in 2003. The consumer segment remains a key driver with portable shipments growth of more than 40% outpacing the commercial segment by roughly 5 points. Growth of desktop PC shipments is expected to slow to low single-digits from nearly 10% in 2004.
  • Japan – The business segment continues to lead the market, although relatively strong growth of 12% in 2004 is expected to fall below 5% in 2005. Unfortunately, the consumer and public sectors have not recovered, and growth in these segments is expected to be roughly flat in 2005.
  • Asia/Pacific – Growth is expected to slow from over 16% in 2004, but remain in double-digits despite the Indian Ocean Tsunami and efforts to control China's economy. Public sector growth is expected to outpace growth in business segments by the end of the year, while consumer growth will slip into single-digits.

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