Gartner projecting weaker second half for PC shipments

Slower-than-expected economic recovery in the U.S. and Europe are to blame

Gartner on Tuesday joined PC and chip makers in projecting a weaker-than-expected second half for worldwide PC shipments in light of slower economic recovery in mature markets.

The research company downgraded its forecast for PC shipments during the second half, saying it will grow by 15.3 percent, which is around 2 percent lower than the previous forecast.

Consumer and business demand for PCs will remain strong and continue to grow, but at slower rates relative to earlier expectations, said Ranjit Atwal, research director at Gartner.

"Consumers buoyed the PC market in 2009 as businesses delayed their purchases. The slow pace of economic recovery and austerity measures in Europe have made PC suppliers very cautious in 2010," Atwal said in a press release.

The slowdown also comes from uncertainty in economic recovery in the U.S., Atwal said.

PC shipments slowed dramatically by the middle of 2009 due to the recession, but started gaining steam in the second half of last year, according to industry surveys. PC shipments hit higher-than-expected growth rates in the first two quarters of this year, according to Gartner.

PC shipments during the first and second quarters grew partly due to robust economic recovery in the EMEA (Europe, Middle East and Africa) regions, according to Gartner.

PC and chip makers over the last month have projected a slowdown in consumer PC demand during the second half of the year. During an earnings call on Aug. 19, Dell's chief financial officer Brian Gladden said the company saw a weakening in demand for consumer PCs, but that he also expected the consumer business to gain steam during the holiday season in December.

Intel on Friday lowered its revenue forecast for the fiscal third quarter of 2010, citing lower-than-expected demand for consumer PCs in mature markets. Nvidia, which makes graphics cards that go into laptops and desktops, earlier this month said its second-quarter profitability was affected by higher memory prices and economic weakness in Europe and China, as consumers shifted to lower-priced graphics processing units and integrated graphics.

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Agam Shah

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