PC shipments to decline for first time since dot-com bust

IHS iSuppli says the back-to-school season appears to be weak and new devices like ultrabooks aren't selling well.

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Shara Tibken was a managing editor at CNET News, overseeing a team covering tech policy, EU tech, mobile and the digital divide. She previously covered mobile as a senior reporter at CNET and also wrote for Dow Jones Newswires and The Wall Street Journal. Shara is a native Midwesterner who still prefers "pop" over "soda."

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Shara Tibken

Oct. 10, 2012 11:04 a.m. PT

2 min read

Lenovo hopes products like its new convertible PCs will help buoy computer sales. Dan Ackerman/CNET

In case we needed any more evidence about a grim PC market, IHS iSuppli has clinched it.

Worldwide computer shipments are set to decline this year for the first time since 2001, the tech research firm says today. That means the market will total about 348.7 million units in 2012, down 1.2 percent from last year.

IHS noted that the year started out promising, with Intel and PC makers touting thin-and-light ultrabooks at the Consumer Electronics Show in Las Vegas. But quarterly sales have proved to be disappointing, and the usual boost from the key back-to-school season "appears to be a bust."

"There was great hope through the first half that 2012 would prove to be a rebound year for the PC market," said Craig Stice, senior principal analyst for computer systems at IHS. "Optimism has vanished and turned to doubt, and the industry is now training its sights on 2013 to deliver the hoped-for rebound."

PC sales are expected to decline this year for the first time since the dot-com bust in 2001, according to IHS iSuppli. IHS iSuppli

PC market growth has slowed of late as consumers, cautious about the global economy, hold off on computer purchases in favor of mobile devices. Intel, which has been driving the move to ultrabooks, last month cut its revenue guidance for the third quarter by about $1 billion. At the time, the chip giant said it was seeing "weaker than expected demand in a challenging macroeconomic environment."

Intel and its PC partners are counting on ultrabooks and the launch of the newest Windows operating system to help reinvigorate PC sales.

Still, IHS says some important questions remain for the PC market, including:

• How much impact will Windows 8 really have when it comes to possibly boosting the PC market in the fourth quarter?

• Will continuing global economic concerns neutralize whatever hype or interest has been generated by ultrabooks?

• Will mobile computing gadgets such as tablets and smartphones win over PCs during the crucial holiday selling season, taking precious consumer dollars and keeping PC sales at bay?

The firm says that, for now, there are signs a strong rebound could still occur in 2013.

"While IHS has reduced its forecast for them, the new ultrabooks and other ultrathin notebook computers remain viable products with the potential to redraw the PC landscape, and the addition of Windows 8 to the mix could prove potent and irresistible to consumers," IHS said. "Whether a newly configured PC space could then stand up to the powerful smartphone and tablet markets, however, remains to be seen."