Gartner: Economy, Threat of War Depress PC Sales

While PC unit sales are expected to grow this year, that growth is being stunted by the current economic instability and the threat of war with Iraq, according to a new report from Gartner Inc.

Economic and political uncertainty is clouding the global PC market, lowering the industry analyst firm’s expectations for PC sales in 2003. The new Gartner report notes that the worldwide uncertainty has helped to stall the global economy and is raising doubts about the nearness and strength of a recovery. These economic jitters are depressing PC sales for first-time buyers and are stalling replacement sales for older PCs.

Gartner analysts predict that PC unit sales for this year will grow nearly 7 percent. Next year, the numbers should continue to increase with an expected growth of more than 11 percent.

But those growth predictions have been tamed.

Just this past February, Gartner analysts developed three PC forecast scenarios based on assumptions made about the outcome of the U.S./Iraq situation, its impact on the worldwide economy and its affect on the PC market. In those three scenarios, Gartner predicted that PC sales would grow between 1 percent and 12 percent.

This updated forecast falls within that range but is more pessimistic than the predictions made just a month ago.

”A PC market recovery remains inexorably linked to a general economic recovery,” says a Gartner spokesman in the written report. ”Gartner believes a large pool of installed PCs, purchased in 1999 and 2000, are due for replacement. Unfortunately for PC vendors, these PC owners are likely postponing replacement… in light of the weak and uncertain economy.”

The report notes that modest sales should continue through the first half of this year, with an increase in sales coming in the second half of 2003.