Desktop PCs Stop Their Downward Shipments Spiral, Analysts Say

By Jacqueline Emigh

After dropping in shipments for nearly two years, desktop PCs garnered their first year-on-year growth during the first quarter of 2010, according to a report by analyst firm iSuppli. The desktop PC news, though, was practically only a footnote in a report focused more keenly on much stronger growth in notebook PC shipments.

Spurred by a notebook PC growth rate of 25.5 percent, the overall PC market surged upward by 22.7 percent in the first three months of 2010, rising to 81.5 million units from 66.5 million units during the same period in 2009, the iSuppli analysts said.

In contrast, desktop PCs rose merely 1 percent, but this small gain represented the first increase in PC shipments since the second quarter of 2008.

"The first three months of 2010 delivered the highest quarterly PC shipment growth on a year-over-year basis since iSuppli started tracking the market in 2003," remarked Matthew Wilkins, principal analyst for compute platforms at iSuppli, in a statement.

Wilkins attributed the PC shipment boom to a combination of strong sales in Q1 of this year and weak market conditions in Q1 of last year. "Early 2009 represented one of the weakest periods in the history of the PC market, as consumer and corporate demand plunged due to the economic downturn. With economic conditions improving, PC sales rebounded in 2010," the analyst contended.

The report also pointed to particularly strong year-over-year growth by Asian PC makers ASUSTek, Samsung, Lenovo, and Acer. Sixth-place-ranked ASUSTek showed the biggest leap, with its sales soaring by 136.2 percent to a total of about 4.4 million in Q1 2010.

Acer remained in second place among the top ten PC manufacturers, but its shipments rose by 47.1 percent to 10.8 million As a result, Acer narrowed the market share gap with number one-ranked Hewlett-Packard. Acer's share stepped from 11.1 percent in Q1 2009 to 13.3 percent in Q1 2010, only 6.3 percent behind HP's 19.6 percent share for the quarter.

For its part, though, Hewlett-Packard showed hefty growth of 22 percent, moving from shipments of 13.million in the first quarter of 2009 to 15.9 million a year later.

Likewise, third-place runner Dell rebounded by 21 percent, with shipments of 10.7 million in Q1 2010 in comparison to 8.8 in Q1 2009.

Although still ranked in seventh place among PC makers, Apple demonstrated the strongest growth of all the US-based manufacturers, stepping up 32.4 percent from 2.1 million units shipped in Q1 2009 to 2.8 million in Q1 2010. Wilkins gave credit to "the halo effect of the enormous popularity of iPhones and iPads."

The iSuppli report issued on June 4 also included a forecast of overall PC unit shipment growth of 17 percent for 2010, with continuing increased demand for notebooks and "flat growth" - apparently with little or no decline - for desktop PCs..

Nine days earlier, analyst firm Gartner had given a preliminary growth forecast of 22 percent for the worldwide PC industry this year, projecting that shipments will rise from 308.3 million in 2009 to 376.6 million in 2010.

Gartner foresaw stronger growth of 29.5 percent in the consumer market than the 13.1 percent anticipated in the professional market. In a written statement, however, Ranjit Atwal. a principal research analyst, said that Windows 7 adoption together with the aging life of existing PCs will help drive growth among business users.

Gartner's report did not specifically compare desktop vs. notebook PC growth. Yet Raphael Vasquez, a research analyst at Gartner, predicted that, after rising 30 percent in shipments from 2009 to 2010, PCs in the now relatively affordable mini-notebook PC segment will start to wane in 2011, due to "increasingly competitive ultralow-voltage (ULV) products, the decreasing prices of all mobile PCs and the maturing tastes of customers."