IDC: PC market on the comeback trail

After two tough years, the PC market will experience tangible growth again in 2003 and 2004 due in part to the rise of wireless, says market research firm IDC.

Michael Kanellos Staff Writer, CNET News.com
Michael Kanellos is editor at large at CNET News.com, where he covers hardware, research and development, start-ups and the tech industry overseas.
Michael Kanellos
2 min read
After two tough years, the PC market will experience tangible growth again in 2003 and 2004 due in part to the rise of wireless, according to market research firm IDC.

Shipments of desktops, notebooks and servers based around PC architectures will rise 8.3 percent in 2003 to 147.5 million units, then rise 11 percent to 163.8 million units in 2004, according to IDC.

PC shipments will increase in 2002, but only marginally. Shipments will likely reach 136.2 million units for 2002, a 1.6 percent increase over 2001, IDC said. Last year marked one of the worst years in the history of the PC industry, with shipments shrinking 4.2 percent worldwide and 11.4 percent in the United States.

The total number of PCs shipped in 2002 likely will be below the high watermark of 139.9 million units in 2000, a milestone that 2003 will surpass if projections are met.

The rise in shipments, IDC said, will derive in part from the growing popularity of wireless networks and improved notebook technology--trends all the major companies are trying to latch onto.

One of the first major product releases in 2003, for instance, will be Banias, a brand-new, energy-efficient notebook chip from Intel. Most major manufacturers will release Banias notebooks. The majority of these notebooks will come with a PC card modem, code-named Calexico, for wireless Internet connectivity.

Still, executives at other companies have emphasized that the outlook for business buying remains hazy. Business and consumer sales will have to increase to make up for what could be a decline in public sector purchases in 2003. Governments and businesses buy roughly two-thirds of PCs, while households purchase the remaining third.

"We continue to expect slow worldwide PC shipment growth for the next several quarters before the market accelerates in the latter half of 2003," Loren Loverde, director of IDC's PC tracker, said in a statement. "While business spending has been slow to recover, we believe it will pick up in the first half of 2003, and market drivers like portable adoption, wireless networking, broadband adoption and new designs...will support moderate growth."

Semiconductor manufacturers and some PC makers already have begun to report an upswing in sales. On Thursday, Intel predicted that fourth-quarter revenue will be $6.8 billion to $7 billion, higher than the $6.5 billion to $6.9 billion range projected in October. Similarly, rival Advanced Micro Devices said that revenue for the fourth quarter will be around $700 million, above original predictions.

Nonetheless, a global crisis could easily change these projections. Government buying in North America, Europe and Asia buoyed sales in 2002. A war in Iraq could depress both business and consumer sales, IDC speculated. The research firm predicted that sales likely will decline again in 2005.