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PC market ahead of analyst expectations

After suffering through last year's slump--its worst decline in more than a decade--the PC industry is faring much better than originally expected, according to IDC analysts.

After suffering through last year's slump--its worst decline in more than a decade--the PC market has been faring much better than originally expected this year, according to IDC.

The firm says higher than expected unit-shipment growth in the first quarter and residual strength in some market segments have prompted it to increase its forecast for worldwide PC unit growth for the year from 3 percent to 4.7 percent.

Originally, IDC predicted a growth rate of just 1.8 percent for the year. But the company says strong consumer sales as well as a pickup in small-business sales have pushed the market along more briskly than originally thought.

An increase in sales at large companies, though, has been elusive so far. Most PC makers believe such an increase will signal a real recovery in the market and in the economy as a whole.

"We are still waiting for large-business spending to kick in," said Loren Loverde, director of IDC's Worldwide Quarterly PC Tracker, in a statement.

IDC said it expects the increases in unit shipments typically seen in the second half of the year to be lifted by slow but steady improvement in the overall commercial sector.

As a result worldwide unit sales, which declined by about 5 percent, to 133.5 million, in 2001, will pick up to 139.7 million, just a hair above 2000's 139.2 million and well above 1999's 120 million units shipped.

But growth will vary dramatically by region.

The U.S. market, for example, is expected to grow 5.5 percent for 2002 on strong demand from consumers and small businesses. The Asia-Pacific market will also begin a recovery in the second half of the year, IDC said.

Europe and Japan are expected to be glum for quite some time. Poor demand for desktops from consumers and businesses will limit Europe's PC recovery in the future, IDC said, while increasing unit shipments in Japan won't be enough to stave off an overall yearly decline for 2002, the firm said.

IDC expects the PC market to return to double-digit growth in 2003, with shipments rising 11 percent, to 155.3 million units, with the help of an increase in demand for PCs from large companies.

The company recently increased the size of its model for the worldwide PC market by just over 6 percent, to 133.5 million, for 2001 because of a new study on the white box PC market. That market, made up of smaller local or regional PC makers, was found to be larger and healthier than IDC previously thought.