Previously, PC units had their worst decline in 2001 when unit shipments shrank 3.2 percent.

"The PC industry is facing extraordinary conditions as the global economy continues to weaken, users stretch PC lifetimes and PC suppliers grow increasingly cautious," said George Shiffler, research director at Gartner.

George Shiffler III

Both emerging and mature markets are projected to see record market slowdowns. Up to this point, emerging markets collectively recorded their lowest growth in 2001, 11.1 percent. Mature markets had their lowest growth in 2001, negative 7.9 percent. In 2009 emerging markets are expected to post a decline of 10.4 percent and mature markets a decline of 13 percent.

"Growth in both emerging and mature markets will be driven by similar dynamics even if the precise impacts vary somewhat. Slower GDP growth will generally weaken demand and slow new penetration, lengthening PC lifetimes will reduce replacements, and supplier caution will keep inventories at historic lows until confidence in a recovery eventually firms," Mr. Shiffler said.

Global mobile PC shipments are forecast to reach 155.6 million units, a 9 percent increase from 2008. Desk-based PC shipments are expected to total 101.4 million units, a 31.9 percent decline from 2008. Mobile PC growth will be substantially driven by continued growth in mini-notebook shipments.

Worldwide mini-notebook shipments are forecast to total 21 million units in 2009, up from 2008 shipments of 11.7 million units.  Mini-notebooks will cushion the overall PC market slowdown, but it won’t be enough to prevent the market’s decline. Mini-notebooks are projected to account for just 8 percent of PC shipments in 2009.

"The mini-notebook market is dividing as vendors offer more systems with 9" to 10" screens in addition to those to with 7" to 8" screens," said Angela McIntyre, research director at Gartner.

"For the most part, users are moving toward systems with larger screens and greater capabilities; systems with 8.9" screens were the standard in the second half of 2008."
 

The U.S. market showed signs of the economic slowdown, but growth remained positive at 3.5 percent for the quarter. The other international markets compensated for the U.S. coming in more than 2 points above estimates due to continued strength in developing countries.

Most of the growth came from notebook markets, specifically the consumer notebook segment in retail environments."Notebook purchases are driving consumers beyond one PC per household to one PC per person and manufacturers are reacting by focusing their attention on customization and personalization," said Bob O’Donnell, vice president, Clients and Displays.

"The ability to see and touch these devices in the retail environment and pick one out that matches a consumer’s unique style is a critical part of the buying process for consumers."

Dell had its best quarter in almost two years due to its new retail presence and its growing strength in the portable market. The company saw a 21.6 percent improvement in year over year shipments.

HP shipment growth rates outpaced the overall market, but were the lowest among the top five vendors this quarter at 17.4 percent.

"With the weak economy in the United States, PC shipments were negatively impacted by cautious PC buying in the consumer and commercial markets," said Doug Bell, research analyst, U.S. PC Tracker Program.

"Despite the tough economic environment, shipment growth remained in positive territory, essentially driven by the sustained shift to mobility, combined with Dell’s renewed competitive stance."
 

"The PC market experienced a boost from better than expected sales in the United States, Asia/Pacific and Latin America," said Mikako Kitagawa, principal analyst for Gartner’s Client Computing Markets group.

"The U.S. deskbased PC market beat our expectations, due in part to higher than expected sales in the professional market. In the Asia/Pacific region, China and South East Asia saw strong shipment growth."

Mobile PC demand was strong, while Vista’s impact on consumer demand was minimal. Hewlett-Packard remained the No.1 vendor based on PC shipments and had 18.2 percent of global shipments. HP grew faster than the world market average for the ninth quarter in a row.

In the U.S. market, PC shipments hit 15.7 million units in the second quarter of 2007. This was a 5.9 percent increase from the second quarter of 2006. Gartner had previously estimated growth of 3.2 percent.

Dell kept its No.1 position in the U.S. market even though its growth was below the U.S. average in the second quarter. "Dell had difficulties in its consumer business. Dell made its first major retail shipments to Wal-Mart stores, however volumes were not significant enough to influence its growth performance in the quarter," Ms. Kitagawa said.