Gartner Negative on PC Growth

Technology research firm Gartner ( IT - Snapshot Report ) , recently lowered its PC shipment forecast for the year 2011 and 2012. The research firm considered a number of factors before lowering its forecast for the aforesaid period.

For fiscal 2011, Gartner lowered its estimate from 9.3% to 3.8%, based on the sluggish economic growth in Western Europe and the United States, and the growing demand for media tablets. Moreover, the popularity of Apple's iPad has dented consumer demand for personal computers, while the expected recovery in the corporate and government PC replacement cycle has been derailed by the U.S. and European debt crisis and associated fallout.

Although the firm expects growth to pick up in 2012, its apprehension is evident from the fact that the 2011 forecast was lowered. Gartner now expects 404 million units in 2012, up 10.9% but down from the original projection of 12.8% growth. The research firm also expects tighter consumer spending going forward.

Hewlett-Packard ( HPQ - Analyst Report ) declared in August that it may shed its PC business, which is the world's largest after the acquisition of Compaq in 2002, as a part of its series of moves away from the consumer market.

The research firm believes that tablets have changed the dynamics of the PC market and HP's decision to reconsider its PC strategy confirms the fact.

After Hewlett-Packard, the second largest PC manufacturing company Acer Inc. reported the first quarterly loss in its history. The company is currently undertaking various initiatives to resurrect its first half, but believes that it is not feasible to reach a break even for the full year.

Moreover, Gartner expects consumer spending as well as business spending to tighten, owing to the sluggish demand for PCs.

As per the report published by the research firm, the new generation of PCs has failed to generate much interest among older buyers who in turn are extending the life of their current products and creating business for PC shops and IT departments.

This is where complementary devices such as tablets make inroads. They offer a new paradigm in the space with their small form factor and long battery life that lends increased portability and use.

The change in preference of the end customers is having a negative impact on the PC market.