PC industry faces sharpest decline in history

Hewlett-Packard, the world's biggest PC maker, cut its 2009 profit outloook, with the economic turmoil hurting nearly all of its businesses.

computer 88 (photo credit: )
computer 88
(photo credit: )
The worldwide PC industry will experience its sharpest shipment decline in history this year as the global economy continues to deteriorate, technology research group Gartner Inc. said Monday. PC shipments are expected to decline 11.9 percent to 257 million units in 2009. Until now, the worst decline in PC shipments was in 2001, the height of the tech-bust-fueled recession. That year, unit shipments contracted 3.2 percent, according to Gartner. The forecast Monday was largely expected, as technology heavyweights like Dell Inc., Hewlett-Packard Co. and Microsoft Corp. had issued lackluster earnings and forecasts. HP, the world's biggest PC maker, cut its 2009 profit outlook last month, with the economic turmoil hurting nearly all of its businesses. It also reported a 13% drop in its fiscal first-quarter profit, as even its lucrative printer-ink business felt the recession's squeeze. Dell, the No. 2 PC maker, posted a 48% decline in its fourth-quarter earnings also cut its 2009 guidance - though it was still in line with Wall Street's expectations. Gartner expects both emerging and mature markets to suffer "unprecedented" slowdowns. Slower gross domestic product growth will weaken demand and lengthen PC lifetimes as people and businesses wait longer to replace their computers. "The impact of reduced replacements will be especially acute in mature markets, where replacements are estimated to account for around 80 percent of shipments," George Shiffler, research director at Gartner, said in a statement. At the same time, mobile PC shipments are expected to grow, boosted by growing demand for mini-notebooks - low-cost, low-power computers. These computers "cushion the overall PC market slowdown, but they remain too few to prevent the market's steep decline," Gartner said. Mini-notebooks are forecast to represent just 8% of PC shipments in 2009.