Even netbooks won't save PC market this year

Netbook shipments will see tremendous growth this year but won't be enough to boost overall worldwide PC shipments, which will sink due to the global economic downturn, according to surveys from IDC and Gartner released on Wednesday.

Shipments of netbooks, or mini-notebooks as IDC calls them, totaled 10 million in 2008 and will likely double this year, IDC said in a study. But the growth will be outweighed by slow or even declining sales of traditional laptop and desktop PCs, IDC said. IDC defines netbooks as devices with 7- to 12-inch screens and a fully functional OS like Windows XP or Vista.

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Even Microsoft's Windows 7 OS won't give PC shipments a big lift if it ships this year ahead of schedule, as some expect, said Doug Bell, research analyst at IDC. There may be an initial spike as early adopters climb on board, but most consumers will likely wait until the economy recovers. As usual with a brand-new OS, corporations will delay adoption until bugs have been worked out, which could run into the middle of 2010 or beyond, Bell said.

After six consecutive years of growth, worldwide PC shipments fell 0.4 percent year-over-year in the fourth quarter of 2008, according to IDC. Shipments of mainstream laptops and desktops will continue to be slow this year but should recover by mid-2010 as economies recover and consumer spending increases.

A main concern for vendors is the lack of corporate spending on IT equipment, Bell said. Budgets are frozen and not likely to open up soon to refresh PCs, he said. Price-sensitive consumers are also increasingly opting for cheaper PCs like netbooks priced between $300 and $500.

Netbooks are having the trickle-down effect of driving down prices for mainstream laptops, Bell said. That has driven down margins of PC makers, who have been forced to introduce cheaper systems to meet demand. All major vendors including Hewlett-Packard, Dell, Acer and Lenovo are now offering netbooks.

Netbooks are also reaching buyers in new ways, which could boost their shipment numbers. They are being offered as part of telecommunication bundles to consumers in Europe, for example. That trend has already started to appear in the U.S., with the Acer Aspire One being offered by RadioShack for $99.99 with a two-year AT&T mobile broadband plan.

Netbooks helped Acer record a 25.3 percent growth in its worldwide PC shipments during the fourth quarter, Bell said. By contrast, top vendors Hewlett-Packard and Dell struggled to record solid growth. HP shipped 15 million PCs in the fourth quarter, a 3.1 percent year-over-year gain, to give it 19.6 percent market share. Dell saw its shipments fall year-over-year by 6.3 percent to 10.6 million. Acer's shipments were 9.1 million, followed by Lenovo, which saw a 4.8 percent drop in shipments to 5.6 million. Toshiba saw its shipments climb 20.2 percent to 3.7 million for fifth place.

Acer's growth was particularly strong in the U.S., where shipments jumped 55 percent in the fourth quarter, increasing its lead over Apple as the third-largest PC vendor, according to Gartner.

Acer shipped 2.38 million PCs in the U.S., while Apple's sales increased 8 percent year-over-year to 1.26 million units. Dell and HP, the top two PC vendors in the U.S., saw their sales decline. Dell's shipments fell by 16.4 percent to 4.47 million units, giving it 28.6 percent of the market. In close second, HP saw its shipments drop 3.4 percent to 4.3 million. Toshiba came in fifth place.