Cloud and economy impact on PC sales growth

The struggling economy and ever-expanding cloud computing market slows PC sales growth

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IT analyst firm Gartner expects the growth in global sales of PCs to slow to a whimpering 3.8 per cent this year, with a total of 364 million units sold.

Original projections had suggested a 9.3 per cent growth this year but lingering economic instability in Western Europe and the United States has impacted upon corporate infrastructure investment plans.

Next year, the growth is expected to resume at a more typical level of 10.9 per cent, to a total of 404 million units, although this projection has also been downgraded from its original 12.8 per cent.

According to Gartner research director Ranjit Atwal, the emergence of a large stable of competing technologies with overlapping functionalities will have forced the PC down the pecking order in both consumers' and businesses' list of priorities while their expendable income remains tight.

Of course, the emergence of cloud computing services and technologies gives portable devices such as laptops and tablets a much bigger arsenal of functionality than their desk bound brethren.

"Generation Y has an altogether different view of client devices than older generations and are not buying PCs as their first, or necessarily main, device," Mr. Atwal said. "For older buyers, today's PCs are not a particularly compelling product, so they continue to extend lifetimes, as PC shops and IT departments repair rather than replace these systems."

Poor back-to-school sales of PC form the latest evidence of this position. And last month, Hewlett-Packard, the world's biggest PC maker, provided a huge surprise by announcing that it may leave the market, instead focusing on developing software.

George Shiffler, a second research director at Gartner, added: "Media tablets have dramatically changed the dynamic of the PC market and HP's decision to rethink its PC strategy simply highlights the pressure that PC vendors are under to adapt to the new dynamic or abandon the market.

"Vendors' tried and true business models are failing as traditional PC functionality is extended to other devices, and users continue to lengthen PC lifetimes. Vendors only seem to be flailing as they look for quick fixes to their problems. Unfortunately, the resulting chaos is just creating more confusion across the entire PC supply chain, impacting sell-in."