Percentage growth in the local PC market plunged to its lowest level for nine consecutive quarters in the period ending December 2008. Growth declined 7 percent against the previous quarter, having fallen sharply throughout the year (see IDC graph below). Quarter on quarter growth declined throughout 2008, from about 13 percent to minus 7 percent.
Although the overall PC market grew by 11.5 percent for the year, market conditions were challenging because of economic uncertainty and increasing hardware prices, says IDC in its PC Market Summary for the fourth quarter of 2008. The market also failed to meet expectations because of “very slow” consumer desktop shipments, lengthening refresh cycles and the impact of the depreciated New Zealand dollar, says IDC.
“Due to the change in the exchange rate, the perceived value per dollar has worked in favour of the more premium brands,” says Stefan Nordbruch, IDC’s infrastructure and IT services associate analyst.
While enterprise commercial desktop refreshes continued apace in early 2008, they declined in the second half of the year and the trend slowed markedly, quarter on quarter.
Overall, portable shipments declined by 3 percent to 90,991 units. This reflects 15 percent growth year on year (by comparison, in 2006 the overall laptop market grew by 23.6 percent).
Growth in shipments of 1 percent for consumer laptops in 2008 didn’t compensate for a 9 percent decline in commercial laptops for the same period. This continued growth for consumer laptops suggests smaller companies may be deploying consumer models rather than commercial offerings, to save money.
Nordbruch says sole proprietors may have taken up tempting finance offers and bought consumer devices for use in a commercial context. “The issue with consumer versus commercial models is manageability, availability of parts, standardisation of IT infrastructure and the provision of maintenance and support.”
He says most of the growth in laptop shipments continues to be driven by genuine consumer demand.
“There wouldn’t be much of an incentive for companies to buy a consumer laptop,” he says, “because the difference in price between entry-level commercial laptops and entry-level consumer laptops isn’t substantial enough.” However, companies are holding on to their existing portables — as they are with desktops — rather than upgrading.
Desktops continued a downward trend, declining 9 percent year on year to 67,844 units.
This was due to a 25 percent decline in consumer desktop shipments, while commercial desktop shipments remained largely flat, dropping 1 percent.
Consumer laptops are putting pressure on their desktop equivalent, Nordbruch says, due to similarities in specifications and a general lack of desktop innovation.
“We’ve seen a softer quarter for consumer desktops and the decline was quite significant. I wouldn’t expect that to improve significantly for the next two quarters at least.”
Nordbruch says the PC market is by now so mature that it would require some startling innovations for a new supplier to gain a presence in the rankings.
However, although the names in the lists of top five desktop and laptop vendors is by now very familiar, there continues to be some jockeying for position every quarter.
IDC is forecasting a further market decline of 3 percent for 2009 over 2008.