IDC drops forecast for 2011 chip sales

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IDC drops forecast for 2011 chip sales

Analyst firm IDC lowered its estimate for worldwide PC microprocessor unit shipment growth in 2011 from 10.3 percent to 9.3 percent, attributing it to economic headwinds that are affecting consumer PC demand in developed regions.

Waning consumer PC demand prompted both IDC and Gartner to reduce consumer PC shipment estimates for 2011 earlier this year. In June, IDC pegged worldwide PC shipment growth for 2011 at 4.2 percent, down from a February estimate of 7.1 percent. Gartner's rosier prediction was for 9.3 percent growth, down from a March estimate of 10.5 percent.

Slowing consumer demand in developed regions reflects a variety of economic issues, said Shane Rau, director of computing semiconductor research at IDC.

"In Japan, it's lingering effects of the March earthquake and tsunami. In Europe, it's sovereign debt issues, such as concern that debt issues in Greece, Portugal, and Ireland will spread to larger economies in Europe. In the US, it's job market and mortgages," said Rau. "All of these issues make the potential consumer PC buyer concerned for their immediate future and so conservative with their spending."

Intel, in its second quarter earnings call, highlighted this conservative spending in mature markets like the U.S. and Europe. However, Intel president and chief executive Paul Otellini said emerging markets such as Brazil continued to be a growth area for Intel. In fact, Otellini highlighted Brazil's "astounding" growth and said the country is poised to become the third largest PC market in the world by 2012.

Even in light of the downward revisions for both PC processors and overall PC shipments, IDC expects emerging markets and the release of new chip platforms to drive growth moving forward.

“The PC market has definitely hit a slow patch,” IDC analyst Loren Loverde said back in June. “Nevertheless, the long-term growth drivers -- first among which are growth in emerging markets, declining prices and growing functionality -- remain intact, and the product and design innovations under way will keep PC growth healthy in the long term.”

This article originally appeared at crn.com

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