Researcher Slashes 2009 Forecast For PC ShipmentsResearcher Slashes 2009 Forecast For PC Shipments

ISuppli on Thursday chopped its 2009 forecast for PC shipments by nearly two-thirds because of rapidly deteriorating conditions in the global economy and financial system.

The market researcher said shipments would increase next year by 4.3%, compared with 2007. In 2010, shipments would rise by 7.1%. ISuppli had previously forecast increases of 11.9% and 9.4%, respectively.

"Since iSuppli published its last worldwide PC forecast, the landscape of the global economy has changed dramatically, and in many ways irrevocably," iSuppli analyst Matthew Wilkins said in a statement.

Those changes include the crumbling financial system that has led to government bailouts and once-revered banking institutions being forced to sell themselves to competitors. As a result, businesses have seen interest rates rise and have found it difficult to get credit.

"The result of the financial turmoil is less money to spend, and often that money is itself more expensive," Wilkins said. "With less money to spend, application markets, like PCs, have been impacted."

For the last five years, the PC market has recorded annual growth rates around 10%, with 2008 expected to become the sixth year with a projected 13% increase. Nevertheless, under the economic crisis that began in the third quarter, companies are likely to have more on their minds next year than buying information technology.

"Real issues -- such as difficulties in paying staff or making rising mortgage payments -- are affecting businesses as well as consumers," Wilkins said. "In light of such financial issues, the task of refreshing or acquiring new IT equipment has taken a back seat."

Desktop PC shipments next year are expected to decline by about 5%, while notebooks shipments are projected to grow around 15%, according to iSuppli. Notebook shipments will remain relatively strong in part because of lower prices, particularly in the "netbook" category, iSuppli said. Netbooks, or mini-notebooks, are sub-$500 machines with screen sizes of 10 inches or less. The systems are typically sold to the education market or to adults looking for a second or third computer to check e-mail and browse the Web on the road.

ISuppli released its revised PC forecast a day after reporting that the semiconductor industry, which supplies PC makers with processors and system memory chips, would see in 2008 its first revenue decline in seven years. The drop is because of fewer orders from PC makers and consumer electronics manufacturers.