In what research firm Gartner is calling a "robust recovery" in certain parts of the world, PC shipments around the globe ballooned to 84.3 million units in the first quarter of 2010. That's a 27.4 percent increase from the same quarter in 2009, and higher than the 22 percent growth Gartner had predicted.
"The stronger-than-expected growth was led by a robust recovery in the Europe, Middle East and Africa (EMEA) PC market, which grew 24.8% in the first quarter of 2010," said Mikako Kitagawa, principal analyst at Gartner. "All other regions recorded double-digit growth rates, although the US and Latin America were slightly lower than what we had expected.
"These first-quarter results indicate that the professional PC market is gradually picking up, driven by PC replacements in mature markets," Kitagawa said. "With a relatively positive macroeconomic outlook, business demand was more forthcoming. Major PC replacement demand driven by Windows 7 will become more apparent in the second half of 2010 and the beginning of 2011."
PC shipments in the US totaled 17.4 million units in the first quarter, representing a 20.2 percent growth rate from one year ago. That's the second consecutive quarter of double-digit shipment growth. Toshiba was a big benefactor in all this, which saw shipments jump by 50 percent as the result of competitive pricing and promotions.
Market research firm Gartner believes that IT spending will continue to trend upwards this year and is projected to reach $3.4 trillion worldwide. That would represent a 5.3 increase over 2009, though Gartner was quick to point out that a dollar today isn't worth what it was yesterday.
"Following strong fourth quarter sales, an unseasonably robust hardware supply chain in the first quarter of 2010, combined with continued improvement in the global economy, sets up 2010 for solid IT spending growth," said Richard Gordon, research vice president at Gartner. "However, it's important to note that nearly 4pp of this growth will be the result of a projected decline in the value of the dollar relative to last year. IT spending in exchange-rate-adjusted dollars will still grow 1.6% this year, after declining 1.4% in 2009."
Much of the growth will come from the infrastructure market, including software to build, run, and manage an enterprise. On the hardware side, Gartner predicts spending to reach $353 billion in 2010, a 5.7 increase from 2009.
"Computing hardware suffered the steepest spending decline of the four major IT spending category segments in 2009. However, it is now forecast to enjoy the joint strongest rebound in 2010," said George Shiffler, research director at Gartner.
A new report by Gartner suggests that by the year 2015, your kids are going to make you feel old. Really old. The reason? They're going to look at you funny when you talk about growing up on PCs without touchscreens, which they'll find more horrific than when your folks used to talk about trekking to and from school 5 miles in a blizzard, uphill, both ways.
"What we're going to see is the younger generation beginning to use touchscreen computers ahead of enterprises," said Leslie Fiering, research vice president at Gartner. "By 2015, we expect more than 50 percent of PCs purchased for users under the age of 15 will have touchscreens, up from fewer than 2 percent in 2009. On the other hand, we are predicting that fewer than 10 percent of PCs sold to enterprises in 2015 for mainstream knowledge workers will have touchscreens."
The reason enterprises will be outpaced by 15-year-olds in adopting touchscreens is because of the heavy requirements for typing and text input, Gartner says. And as prices come down, schools will emerge as a major market to touch and pen-enabled devices, exposing kids to touchscreen computing at a younger age than ever before.
"Consensus among the Gartner client U.S. school districts is that over half, and possibly as many as 75 percent, will be specifying touch and/or pen input within the next five years," said Ms. Fiering. "Consider this as the precursor to a major upcoming generational shift in how users relate to their computing devices."
We've heard all the gloom and doom predictions from PC naysayers, but rest assured, PCs aren't going anywhere. On the contrary, market research firm Gartner predicts PC shipments will skyrocket by 20 percent this year, in part because of mobile devices.
"The PC industry will be overwhelmingly driven by mobile PCs, thanks to strong home growth in both emerging and mature markets," said George Shiffler, research director at Gartner, in a statement.
Mobile devices such as notebooks and netbooks accounted for 55 percent of all PC shipments in 2009, and by 2010, Gartner expects that number to jump to 70 percent. Desktop PCs, on the other hand, aren't expected to see quite as much growth, although Gartner did say the market will remain robust as companies allocate more funds to upgrade their PCs.
Yeah, right, responded comScore. In the language of the smackdown, Alistair Hill, a comScore analyst, said, “I think somebody's missed something out on the math there...I find that hard to believe. We know iPhone users buy a lot more apps than anybody else, but that [Gartner’s finding] still doesn't work.”
Is Gartner right? Maybe. Maybe not. Gartner doesn’t survey the entire app universe, so there’s a chance some data is missing. But, Apple reported 2.5 billion app downloads in 2009. Averaging revenues on downloads, Apple would only need to generate $1.67 per app download, so Apple’s revenue could be legitimate. (Gartner, responding to a follow up from Ars Technica, defends its figures as accurate.)
If market research firm Gartner's numbers are even remotely in the ballpark, then Apple just socked Android in the face, knocked its rival down, and then tea-bagged the little green open-source fanboy. Harsh? You bet, but there's really no way else to describe dominating the $4.2 billion mobile app market by grabbing a 99.4 percent share, leaving just .6 percent for the also-rans.
"As smartphones grow in popularity and application stores become the focus for several players in the value chain, more consumers will experiment with application downloads," Stephanie Baghdassarian, research director at Gartner, said in a statement. "Games remain the number one application, and mobile shopping , social networking, utilities, and productivity tools continue to grow and attract increasing amounts of money."
And most of it falls right into Apple's pocket. Even if Apple should lose some of its market share this year -- and it probably will -- the company still stands to make a king's ransom. According to Gartner, some 4.5 billion mobile apps will be sold in 2010, resulting in $6.8 billion in revenue. Jump ahead to 2013 and Gartner says there will be 21.6 billion apps sold for a total of $29.5 billion in revenue.
Market researcher Gartner is making the call: the six-year decline in PC prices will come to an end later this year, so get ready to pay more. The culprit: a shortage of components.
Manufacturers are facing two problems. Problem one: with prices falling (and the economy crashing), manufacturers have been scaling back on production, resulting in a shortage. Problem two: manufacturers are in the process of ramping up new production lines, and aren’t yet able to meet current demand.
A perfect example is memory. DRAM manufacturers are shedding DDR2 capacity and adding DDR3 capacity. This results in shortages in both, as DDR2 demands are going unheeded, while DDR3 demands are going unsatisfied. Memory makes up about ten percent of the overall cost of a PC, which makes significant the recent 23 percent jump in DDR3 spot prices.
Also in short supply: LCDs and hard drives, with prices for each expected to jump 20 percent. Optical drives are also getting harder to come by.
OEMs can absorb some of these cost increases, but with margins as thin as they are they can’t absorb them all. Some will be passed along to the consumer. How much remains to be seen.
Despite a spattering of optimistic sales reports, chip makers aren't out of the woods just yet. According to market research firm Gartner, worldwide chip revenues are on pace to post a 11.4 percent decline in 2009, which would mark the first time the semiconductor industry has ever seen a decline in two consecutive years, and the just the sixth time posting a decline in the last 25 years.
The struggles in the memory sector have been well documented this past year, but surprisingly, memory revenues declined significantly less than the entire semiconductor industry, Gartner says. What's more, Gartner is predicting a recovery for memory makers, largely a result of memory vendors slashing capital spending in the previous years and supply constraints pushing up prices.
Not all memory makers can look forward to 2010, however, According to Gartner, neither the recession or its recovery were felt equally by all semiconductor vendors. Qimonda, for example, was forced into bankruptcy and some of the weaker Taiwan-based players have had a tough go, which allowed most of the major vendors to pick up market share and, in some cases, report revenue growth.
Nevertheless, Gartner says 2009 goes on the record as one of the worst years for the semiconductor industry since the burst of the dot-com bubble in 2001.
Compared to 2008, the worldwide server market has certainly had its struggles this year. According to data released by market research firm Gartner, global server shipments tanked 17.1 percent over the same quarter one year ago, while revenues for the same period dropped 15.5 percent. But it's all about how you look at the numbers, Gartner points out.
"It is important to put the yearly declines into perspective," said Jeffrey Hewitt, research vice president at Gartner. "Looking at the third quarter results from the sequential perspective, they showed an increase of 13.8 percent in shipments and 10.2 percent in revenues when compared to the second quarter of this year. That suggests that the market as a whole is showing signs of stabilization as we move toward the end of 2009."
It terms of revenue, IBM lead all others in the worldwide server market for the quarter, claiming $3.38 billion. HP wasn't far behind with $3.2 billion in 3Q revenue, and then it drops off with Dell taking the third spot with $1.42 billion in revenue.
On the server shipment front, HP pumped out more servers in the third quarter than anyone else and now holds 32.1 percent of the market share. Dell came in second with a 22.8 percent share, and IBM a distant third with 12.8 percent.
One of the hottest trends in electronics right now is digital readers, but no matter how many companies jump on the bandwagon -- and several of them have -- prices will have to come down before the public embraces them, according to Gartner.
"At the moment it appears that $199 will be the lowest price for fully featured e-reading devices for the 2009 shopping season, but prices will need to drop closer to $99 to gain significant traction," Gartner noted.
At the same time, Gartner predicts e-reader "mania" in 2010, though getting to that point won't be without a few hurdles. The market research firm says a wider variety of retail channels is needed, and more publishers need to be seen buying into e-readers.
"It's the perfect time for a trial and to establish relationships with others in the value-chain -- that is service providers and digital warehouses -- that can be positioned to assist in a rapid deployment if the market takes off earlier than anticipated," Gartner added.