PC gloom to continue through to 2003 – IDC

Windows XP, Pentium 4 price cuts won't help

  • alert
  • submit to reddit

Intel's hopes that September's back-to-school sales period and the arrival of Windows XP on 25 October - plus the Pentium 4 price cuts it's set to make on 26 August - will reinvigorate PC sales aren't shared by market watcher IDC, it seems.

IDC now reckons the eagerly awaited recovery in the PC market will not take place until 2003. Previously it had predicted the turnaround would begin during the first half of 2002. Now, the US and Europe may see a little growth during 2002, but Japan won't turn around for a lot longer.

The reason for IDC's pessimism? Sales to consumers remain depressed and there's little sign that the world's major economies are about to spring back any time soon.

But what about Windows XP? "We're uncertain that WinXP will notably accelerate the market, based on the economy," said Loren Loverde, director of IDC's Worldwide PC Tracker Service, according to CNET. "We're sceptical that it will provide that much kick for the market."

IDC's outlook is broadly supported by fellow market watcher Gartner Dataquest, which today forecast a 26 per cent year-on-year drop in annual semiconductor sales. Last year chip makers sold $226 billion worth of kit - this year their sales will total just $168.1 billion.

For PC market watchers, the telling statement is this one: "There are few signs of growth in design wins. Component prices and lead-times are still low, and electronic system component demand is weak. Based on guidance and early reports from some of the larger bellwether companies involved in PCs, storage and communications, the second half of 2001 will be dismal for the semiconductor industry," according to Gartner Dataquest worldwide semiconductor group chief analyst Mary Olsson.

Poor chip sales effectively means poor PC sales, just as IDC is now saying.

Merchant bank Thomas Wiesel Partners, meanwhile, reckons Intel's 26 August price cuts will feed higher PC sales through the remainder of the year. TWP basis its predictions of a revived PC industry on the improving component supply situation - as inventories normalise, PC makers will start buying memory and other parts again. Meanwhile, users will start buying again to get the best technology.

These factors are certainly likely to improve PC sales, but slight growth through the last six months of 2001 isn't really a sign of recovery, reckons IDC. We'd agree - the points TWP raises will make matters easier for PC makers, but they won't not necessarily attract customers. Some will buy new PCs in the back-to-school period, more will upgrade with Windows XP, but many more will wait until they feel they can better afford new equipment. ®


Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
Application security programs and practises
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
How modern custom applications can spur business growth
Learn how to create, deploy and manage custom applications without consuming or expanding the need for scarce, expensive IT resources.
Securing Web Applications Made Simple and Scalable
Learn how automated security testing can provide a simple and scalable way to protect your web applications.