Gartner Raises its PC Market Projections

by Anton Shilov
11/10/2003 | 03:21 AM

Analysts from Gartner increased their projections of PC sales in the fourth quarter of the year as a result of significantly increased shipments of personal computers in the third quarter 2003. The market trackers, however, warn about possible exuberance, as the main drivers of the PC industry in Q3 2003 were the home and small business markets.

According to Gartner, worldwide PC shipments will total 47.2 million of units in the fourth quarter, up 12.4% from the same period last year. Aggregated sales of personal computers in the year 2003 are said to increase 10.9% versus 2002 and are expected to reach 164.3 million units. Earlier Gartner projected 8.3% growth over 2002.

“Third quarter results were stronger than had been expected, led largely by the home and small business markets,” said Charles Smulders, vice president of Gartner's Computing Platforms Worldwide group.

“We see the third quarter results as an encouraging sign, and consequently we have increased our forecast for the fourth quarter of 2003 as well as the year-end projections. But we remain cautious in our overall outlook,” he added.

Gartner analysts also highlighted four issues that may spoil future PC growth prospects:

• Large-corporate sales. Demand remains lacklustre, with the notable exception of Europe, where the appreciation of the Euro against the US dollar has been driving growth through its impact on euro-denominated prices.
• Home market sales. Despite showing strong growth in the third quarter of 2003, the US home market could prove fragile in the coming quarters, especially because its recent growth may have been driven by temporary factors, such as recent tax rebates and lower tax withholdings.
• Inventory levels. In the US retail market, Gartner believes that inventory levels in October were noticeably higher this year than last year.
• Japanese consumer market. In the strong third quarter of 2003, the Japanese home market appears to have been heavily influenced by early new model introductions in advance of Japan’s new PC recycling law, which became effective 1 October.

In general, there is strong potential for growth, as the prospects of global economic recovery are showing up. Nevertheless, we still should not be too optimistic about the very strong growth of the market, as quite a lot of large companies remain sceptic and may maintain conservative position in their upgrade cycle what will effectively postpone any rebound.