IDC Cuts 2012 PC Outlook as Shipments Slow

By FOXBusiness

Market researcher International Data Corp. cut its outlook on PC growth in 2012, expecting sales to crawl up just 0.9% from last year as mid-year shipments slow.

The company had projected much more robust growth of 5% in June, however weak demand has caused sales to remain sluggish. The fractional improvement marks the second straight year of growth below 2% as people become more reliant on smartphones and tablets and the weak economy continues to curb consumer spending.

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Both Hewlett-Packard (NYSE:HPQ) and Dell (NASDAQ:DELL) this week reported weaker-than-expected quarterly computer sales, with H-P’s down 10% and Dell’s falling 14%.

IDC’s Worldwide Quarterly PC tracker forecasts that 367 million PCs will ship into the market this year. The firm, which provides market intelligence services for the telecom and consumer technology markets, expects 2012 U.S. shipments to fall 3.7%, the second consecutive year of contraction.

Emerging market growth has been impacted by a slowdown in the Asia/Pacific region. In the    U.S. and other Western countries, volume declines reflect the economic downturn and growing demand for other mobile devices.

The U.S. PC market will remain depressed at least until Microsoft’s (NASDAQ:MSFT) Windows 8 products hit store shelves in the fourth quarter of this year, IDC said. Despite the software launch, the firm warned that customers and business will remain cautious with spending.

“As we move into the tail end of the third quarter, PC activity will continue to slow as demand drops,” IDC’s personal computing research director, David Daoud said in a statement. “The third-quarter back-to-school season is also proving to be a challenging period, despite prices dropping to their lowest levels.”

The slowdown will put a damper on medium- and long-range shipments as well. IDC now expects worldwide PC shipment growth will average just 7.1% from 2013 through 2016, down from its earlier forecast of 8.4%.