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PC Market Dips in 2Q, but Upward Trend Seen

PC shipments took a dive in the second quarter, although they were steadied to a degree by consumer spending on portable PCs, according to IDC's latest "Worldwide Quarterly PC Tracker" report, announced this week.

Overall, worldwide PC shipments decreased 2.4 percent in 2Q 2009 year over year. However, shipments of consumer portables -- which include notebooks, mini-notebooks (also known as "netbooks") and ultrathin notebooks -- increased 44 percent from a year ago, according to the report.

Commercial portables used for business did not fare as well, falling 16 percent year over year. Desktop PCs fell by 17 percent over the same time period.

In IDC's first-quarter report released in June, overall PC shipments had declined by 6.8 percent year over year, while portables rose 1.4 percent in the same period.

IDC attributed the rise in portable PC shipments to the popularity of low-cost mini-notebooks. With an average price of just above $400, mini-notebooks are challenging the traditional notebook PC space.

IDC defines mini-notebooks as a portable PC with a screen-size of less than 12 inches. In addition, mini-notebooks typically have a basic-performance CPU (an Intel Atom, AMD Yukon or VIA Nano U-Series) and a full operating system (Windows XP Home edition, Linux, etc.) capable of supporting third-party applications. Mini-notebooks also have keyboards and enable wireless broadband connectivity.

"The primary target market [for mini-notebooks] is consumer and education with basic computing capabilities, such as Web browsing and limited multimedia content use," noted Kathy Naganine, spokesperson for IDC, in an e-mail. "Examples include the Asus Eee PC, Acer Aspire One and the OLPC XO. Systems described as netbooks or ultra-low-cost notebook PCs fit into this category. In tracking these systems, we prioritize the low-cost design over discrete screen size."

A new class of CPU, coined "CULV" (consumer ultra low voltage) by chip-maker Intel, may drive more consumers and businesses to portable PCs, according to Jay Chou, research analyst at IDC and coauthor of the report.

"The emergence of netbooks has had an enormous impact on the portable PC market," said Chou in a telephone interview. "Now, we are seeing a new class of processor that rivals the performance of higher end CPUs, but are used in machines that are closer in size and price to netbooks."

Chou said that historically portable PCs (laptops) have been purchased as companion devices to desktop machines by both consumers and businesses. He noted that the introduction of the smaller and cheaper netbook gave rise to what amounted to a phenomenon in the PC industry, with consumers gravitating toward the new devices.

The netbook space, however, may be impacted by the introduction of portable machines running CULV chips.

"We are seeing a new class of ultra-thin and ultra-light notebooks that provide a sort of middle ground between the higher-end notebooks and the netbooks," Chou said. "These ultra-portables are fast, light, and can have screens up to 15 inches, and they are just a couple of hundred bucks more than netbooks."

IDC sees the overall market for PCs stabilizing over the next few quarters, with worldwide shipments increasing gradually through 2013. The portable PC segment of the market will account for nearly 70 percent of the market in 2013, according to IDC projections.

About the Author

Herb Torrens is an award-winning freelance writer based in Southern California. He managed the MCSP program for a leading computer telephony integrator for more than five years and has worked with numerous solution providers including HP/Compaq, Nortel, and Microsoft in all forms of media.

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