NEW YORK (CNN/Money) – The long-awaited recovery for computer manufacturers still appears to be a few quarters away, according to research firm IDC.
In its latest quarterly update about the personal computer industry, IDC reported that the outlook for PCs in 2003 has weakened mainly due to a relatively new concern: declines in spending by the public sector, namely government agencies and educational institutions.
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| | | | Est. PC Shipments (December) | | Est. Annual Growth | | Est. PC Shipments (Current) | | Est. Annual Growth | | US | 50.8 million | 7.1% | 50.3 million | 5.9% | | Worldwide | 147.5 million | 8.3% | 145.6 million | 6.9% |
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Growth in consumer shipments has already moderated due to economic uncertainty and corporate spending on technology remains in a funk, so news of a slowdown in public sector spending is certainly not a good sign for companies like Dell, Hewlett-Packard, Gateway, IBM and Apple.
IDC is predicting the total number of PC shipments worldwide to increase 6.9 percent this year to 145.6 million, lower than December's estimates of an increase of 8.3 percent and shipments of 147.5 million. In the U.S., shipments are expected to increase 5.9 percent to 50.3 million, down from December's predictions of 50.8 million shipments and 7.1 percent growth.
To be sure, worldwide growth is still expected to be better than the anemic 1.6 percent increase in shipments last year. But volume doesn't tell the whole story. The dollar value of PC shipments, which declined 9.8 percent in 2002, is expected to fall another 1.8 percent in 2003, a further indication that PC companies have little pricing power and that price wars aren't helping to increase revenues.
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Despite a lot of hype surrounding new computers, such as tablet PCs and the wave of new laptops following this week's release of Intel's wireless chip technology Centrino, IDC said that probably won't be enough to launch a new wave of PC sales until the latter half of the year.
"Volumes of these systems still lag their buzz, and technology refresh will not be sufficient to drive significant shipments until the second half of the year, given economic and political uncertainties," said Roger Kay, director of Client Computing at IDC, in a written statement.
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