PC Sales Slump over Economic Crisis

It seems that the Consumer Electronics Show's (CES) poor attendance has been justified by recent statistics suggesting that holiday 2008 was one of the worst ever for the computer industry.

According to research firm IDC: for the first time in five years, the personal computer industry failed to grow over the previous holiday season. In fact, sales over the final three months of 2008 decreased nearly half a percentile in comparison to the same period the year prior.

Although rival research firm Gartner Inc. presented slightly different findings (it found that there was actually a growth of 1.1 per cent), it too proclaimed the recent quarter the worst holiday period in six years. (Source: businesswire.com)

The news comes shortly after it was revealed that CES attendance was down far below organizers' rather conservative estimates. Though event hosts the Consumer Electronics Association figured the number of visitors might be down about 10,000 from last year's 141,000, in the end it appears just over 100,000 made it to the (usually) highly-anticipated event.

Clearly, people are not making tech purchases, nor are they as excited about the kinds of products being developed.

For Gartner analyst Mike Kitagawa, it doesn't appear as though things will get much better in 2009. "The fourth quarter started out with a relatively optimistic view, but then it got worse every month... The first half of 2009 looks pretty shaky." (Source: cnn.com)

IDC analyst Linda Loverde isn't overly optimistic, either. "I won't be surprised if recovery gets pushed further into 2010 as this crisis unfolds," she added.

The damage isn't just limited to the United States. Shipments of PCs in Europe, the Mid-East, and Africa dipped to records posted around the turn of the century. It was even worse in Asia, which according to Gartner, posted its worst growth rate ever -- just 1.8 per cent.

Within the industry, desktops took the hardest hit, as was expected. Sales of non-portable computers were down about 16 per cent as consumers opted instead for the rising 'netbook' and similar hybrids. That fact alone is troubling for PC makers, given that $300-$500 netbooks offer a far lower profit margin than more expensive and more powerful laptops and desktops.