INDIA: Worldwide PC shipments are on pace to reach 274 million units in 2009, a six per cent decline from 2008 shipments of 292 million, according to the latest forecast by Gartner. Gartner now expects the PC market to post positive growth in the fourth quarter of 2009, setting the stage for a healthy market recovery in 2010 with units forecast to grow 10.3 per cent.

Gartner predicts that the Indian PC market will be flat in 2009, witnessing a decline of 0.8 per cent from 2008, which is an upward revision from its earlier projection made in February 2009 of 3.7 per cent decline.

Gartner's latest forecast is somewhat brighter than its preliminary forecast from mid-May, which anticipated a 6.6 per cent unit decline in 2009, and considerably stronger than its last detailed forecast from March, which projected a 9.2 per cent unit decline. However, analysts urged caution and said that while the market appears to be strengthening, it is still premature to say that the worst is over and the market is recovering.

"PC unit growth was stronger than we expected in all markets but Eastern Europe in the first quarter of 2009. In particular, consumer shipments were much stronger than we anticipated," said George Shiffler, Research Director, Gartner. "However, professional shipments continued to struggle, and we think much of the growth in consumer units was due to vendors and the channel restocking inventories rather than an upsurge in demand. We expect units to contract roughly 10 per cent year over year in both second and third quarter 2009 before they post positive growth in the fourth quarter," he added.

Mini-notebooks continued to cushion the market's decline in the first quarter of 2009. Units remain on track to reach 21 million this year and 30 million next year. "However, mini-notebook units posted their first quarter-over-quarter decline in the first quarter of 2009," said Shiffler. "While this was in part the result of the general contraction in PC shipments to the EMEA region, it also reflects increasing competition between mini-notebooks and low-end mainstream mobile PCs as the former evolve toward larger screen sizes, and the latter continue to drop in price. In effect, mini-notebooks are becoming just another value-based mobile-PC offering," he emphasized

Mobile-PC units are forecast to total 149 million units in 2009, a 4.1 per cent increase over 2008, but spending on mobile PCs is expected to decline 12.8 per cent as mobile-PC average selling prices (ASP) continue to drop at an unprecedented rate. The drop in mobile-PC ASP reflects a pronounced market shift to lower-priced mobile PCs, driven in part by mini-notebooks but also by performance-for-price improvements in low-end mainstream mobile PCs. Desk-based PC units are now expected to total 125 million, a 15.7 per cent decline compared with 2008; spending is expected to decline 26.6 per cent.

"Both mobile-PC and desk-based PC units are being held back by users extending PC lifetimes and delaying replacements in response to the ongoing economic slowdown," Shiffler said. "The good news for the industry is that delayed replacements won't be lost replacements. Our research indicates replacements should grow strongly in 2010 and 2011, helping to power the market's recovery."

Gartner analysts said the impact of Windows 7's release in October on the PC market is likely to be very modest.