The tech sector is likely to suffer more company closures and job losses if IDC's predictions of an eight percent drop in shipments comes true.
Times are due to get even tougher for PC manufacturers with the news that shipment forecasts predict an eight percent fall in the first half of this year alone – bad news for a sector already suffering job losses and company closures.
According to IDC's Worldwide Quarterly PC Tracker – via CNet
– the predictions for 1H 2009 are pretty dire: an eight percent drop in PC shipments worldwide, on top of the 1.9 percent drop the market suffered towards the end of last year.
The drop in shipments is thought to be largely down large corporate buyers deciding to put upgrades off until the recession stops biting – meaning a semi-regular source of income has been suddenly cut off. Alarmingly for anyone with investments in technology companies, the drop in sales has been joined by a drop in average selling prices: as sales dropped 1.9 percent in the last quarter of 2008, average prices for PCs from companies including Apple, Lenovo, and Dell dropped five percent. These two factors contributed to an eighteen percent drop in revenue, according to a report from Technology Business Research.
There's some good news on the horizon, however: things are expected to pick up as old equipment fails and necessitates the purchase of replacements. While IDC is still predicting an overall loss of 4.5 percent for 2009, the figure is kept down by expected increase in shipments in the latter half of the year. Even this news is a far cry from the 3.8 percent overall growth for 2009 that IDC was hoping for back in December, and a sad indicator of just how much trouble the technology sector is in right now.
With average retail prices dropping and shipments steadily decreasing, it could get a lot worse for the industry before it starts getting better.
Have you been putting off a major upgrade while you wait to see what the recession brings, or did IDC just over-egg its estimates and is now eating humble pie? Share your thoughts over in the forums