The Canadian client PC market ended 2010 with a strong performance, but IDC Canada is warning of storm clouds on the horizon with the recall of Intel Corp.‘s (NASDAQ: INTC) Sandy Bridge chip set taking a chunk out of the 2011 forecast to drag down the year.
For 2010, the Canadian market ended the year with a strong fourth quarter (Q4) that saw continued positive growth, with unit shipments growing by 5.6 per cent over Q4 2009, good for 1,807,034 units shipped. It capped off a year that saw a recovery from weak 2009 numbers, with market growth on the year of 12.7 per cent.
Diving deeper, portable shipments continued to lead the way, beating forecasts for Q4 with 2.9 per cent year over year growth. While the unit volume of desktops was far lower, the category did grow shipments by 12.7 per cent over the year ago. And the netbook form factor continued to fall to Earth, going from 24 per cent of portable shipments in Q4 2000 to just eight per cent in Q2 of 2010.
While there have been reports that tablets like Apple’s iPad could hurt traditional PC shipments, there’s no sign of that in IDC’s research said Tim Brunt, senior analyst, personal computing with IDC Canada.
“There’s no evidence of cannibalization or anything hindering growth at this point,” said Brunt. “Anyone buying these is primarily buying it as a second device.”
Most tablet sales have been on the consumer side so far, and Brunt expects further growth as vendors begin to bring Windows 7 and Android-based devices to market. It could also be those Windows 7 devices that spur commercial interest, said Brunt.
On the overall vendor leader board, Hewlett-Packard grew its market share in Q4 by 9.1 per cent, capturing 28.2 per cent of the market. Acer fell back by 4.4 per cent, but its 19.1 per cent was still good enough for second. Dell was third at 14.1 per cent, with Apple and Toshiba rounding-out the top five.
Looking ahead to 2011, IDC sees storm clouds on the horizon. The release of Windows 7 service pack 1 should be a positive for commercial sales as enterprise customers use the stability of the OS to release pent-up need for PC refresh. However, while Windows 7 SP1 will be a positive, on the downside Brunt said Intel’s Sandy Bridge recall will take a large chunk out of Q1 numbers in 2011 and drag down the year.
In conjunction with a still cautious economic climate where businesses have minimal budget for capital investment, the high value of the Canadian dollar and the overall market having already recovered from weak 2009 numbers, IDC is forecasting a decline in Canadian client PC shipments for 2011 of 5.5 per cent. Brunt said many retailers are also holding an excess of stock they haven’t been able to move.
And declining demand won’t be the only challenge for channel partners. Brunt said IDC is seeing the continuing erosion of the low end of the commercial space, as the “consumerization” effect leads small businesses to increasingly buy consumer-class PCs through the retail channel rather than enterprise-class products through the reseller channel.
It’s about the sticker shock, said Brunt. With the phenomenal price declines in portables in recent years, businesses see a $400 laptop at Best Buy and can’t help but pull the trigger.
“A lot of lower-end commercial products are being purchased from retailers, and that’s a trend we see continuing as branding between consumer and commercial devices continues to be blurred,” said Brunt.
The trend isn’t a new one, and resellers have been challenged for several years now to educate clients about the differences between consumer and commercial-grade products, and why commercial-class security and support is important.
Brunt said with the margin next to nothing on PCs anyway, partners should care less about where customers buy the PC but instead focus on offering support and services.
Follow Jeff Jedras on Twitter: @JeffJedrasCDN.