RSSUh-oh, netbooks -- not Windows 7 -- will lift 2009 PC sales
By Joe Wilcox | Published November 23, 2009, 2:01 PM
Gartner is just full of bad news that will suck Windows PC manufacturers' thanks out of American Thanksgiving -- and Christmas along with it. Ho Ho Ho Ba Humbug. Today, the analyst firm predicted that based on fourth-quarter PC shipment estimates, for 2009, the market would grow -- but not because of Windows 7 -- and with deep declines in average selling prices. Combined, the latter two predictions spell lower profits for Windows PC OEMs and potentially overshipment of PCs for holiday 2009.
"We just don't see consumers buying new PCs solely because of Windows 7," Gartner research director George Shiffler said in a statement. "We are expecting a modest bump in fourth-quarter consumer demand as vendors promote new Windows 7-based PCs, but the attraction will be the new PCs, not Windows 7."
Microsoft and many of its PC partners were looking for Windows 7 to bring a big sales uplift during the holidays. Microsoft already got its big bang, recording in third quarter the highest quarterly sales ever for any Windows version. Strong OEM Windows sales make sense as PC manufacturers stocked store shelves for holiday sales.
Gartner predicts that globally 298.9 million PCs will ship this year, for a year-over-year increase of 2.8 percent. For 2010, Gartner predicts PC shipments will grow 12.6 percent year over year to 336.6 million units. But Gartner warned that 2.8 percent growth is by no means sign of a recovery, because of the weak year-over-year comparison. Holiday 2008 PC shipments stalled, as manufacturers pulled back inventory following the late-September stock market crash.
More disturbing, in what looks to be a long-term trend, rapidly falling average selling prices are pulling down the total value of the PC market. Gartner predicts a 10.7 percent year-over-year decline in 2009 to $217 billion.
"We don't see PC ASPs rising any time soon," Shiffler said in the statement. "As a result, growth in the market value of shipments will significantly lag shipment growth next year and beyond."
As I've complained all year, netbooks are a menace. Netbooks, what Gartner calls mini-noteboks, pull down ASPs and cannibalize notebook and desktop margins. According to NPD, US retail Windows portable PC ASPs fell to $519 in October from $558 in April and $659 in October 2008. Without netbooks, declines were less severe. By comparison, the Mac portable ASP was $1,410 in October.
Gartner predicts that of the 162 million portable PCs shipping in 2009, 29 million will be netbooks. For 2010: 41 million netbooks out of 196.4 million portable PCs shipped. Next year's netbook shipment gains will come with slower growth, but not enough to lift already sunken ASPs.
"Mobile PC shipments continued to get a significant boost from mini-notebooks," Shiffler explained, adding that "Mini-notebooks are facing increased competition from other low-cost mobile PCs, as well as alternative mobile devices. They are rapidly finding their level in the market, and we expect their growth to noticeably slow as early as next year."
But for holiday 2009, Windows PC manufacturers are looking at netbooks' continued ASP downward pull, even while Windows 7 looks to give only marginal lift to PC sales, if any at all. Meanwhile, Mac US retail laptop ASP was nearly $900 higher than Windows portables in October. Apple will be selling at top dollar and capturing higher margins, following another record quarter of Mac shipments. In third calendar quarter, Mac shipments increased 17 percent year over year to 3.05 million units.
Netbooks are only a part of the problem facing manufacturers and sellers of Windows PCs. The question: Did OEMs and retailers overstock? If the answer is yes -- as Asian component orders and high third quarter Windows 7 license shipments suggest -- retailers will have to heavily discount PCs to clear store shelves during the holidays. All while Mac pricing is expected to remain much higher.
The good news for consumers and retailers, according to Stephen Baker, NPD's vice president of industry analysis: "We anticipate very strong unit volume growth in the core tech categories like flat panels and notebook PCs." The bad news for retailers and PC manufacturers but potentially good for holiday bargain shoppers: "PC Pricing will be very difficult to maintain, and we expect to see aggressive pricing all through the holiday."
No thanks to Windows 7.
This is probably the last XMas buying season for Windows (XP or 7). Next year all the netbooks will be under $200 and many will be $100 and all will be running the Google ChromeOS.
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|Even I can troll better than that. Gotta give a controversial opinion newb.
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|I think the attraction will be Netbooks WITH Windows 7...
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|Acer 1400 series with 7 HP 64-bit 4 gigs, 160G and Dual core, $400 now, and $299 by this time next year. Screw netbooks.
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|The attraction for Microsoft would be all those netbooks with Windows 7 Starter that must be upgraded to Home Premium for better functionality.
I wonder if the sales figures include returns, considering how many people don't realise what a netbook is and are disappointed that they're not getting *everything* for US$299.
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|Umm Joe, claiming that "Microsoft already got its big bang, recording in third quarter the highest quarterly sales ever for any Windows version.", when their client division revenue dipped 39% is deceptive to say the least.
Btw, yes of course I'm not counting Microsoft's deferred revenue, and I dearly hope that you wouldn't either. Particularly after all the Apple GAAP scheisse storm recently... :)
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|Joe,
I've recently read on slashdot that "Getting a fair-price refund from Amazon or Asus after declining the Windows XP EULA appears to be a thing of the past. In contrast to reports from the US and the UK from earlier in the year, Amazon simply refuses and provides information to contact Microsoft. Asus is offering US$6. Despite being confronted with publicly available information about the real OEM price of Windows XP Home Edition being $US25-US$30, Asus replies, 'The refund price for the decline of the EULA is correct in it being US$6. This price unfortunately is not negotiable. I do apologize for any inconvenience this may have caused. Please be assured that it is not ASUS intentions to steer you away in any which way.'"
http://yro.slashdot.org/...d-For-Declining-XP-EULA
Do you know if $6 is how much Asus and other manufacturers pay to Microsoft for XP? That's a *huge* discount to keep Linux away from the netbooks!
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|They all pay different negotiable rates. ASUS isn't giving the real amount, they probably don't want to eat the total cost of the return of the OEM license money.
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|leave it to Joe to make up his own quotes to fit his stories tone, lol, reading this story elsewhere w/ correct quotes
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|I find the article confusing - is it about the total PC market, or the portable PC market?
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|the windows 7 will come on many little microkernel and totally different then Vista
yes I see
totally different
or not, or only just faster
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|Make sure its not Windows Starter Edition.
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|Windows Vienna
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|let me put it this way, my main PC, taken care of til 2014, thats a ways off ;P by the time i buy a new PC (2015), it won't be because Windows 8 arrived it will be because i got my Moneys worth from my previous purchase
i'm not so sure Joe understands what getting your $ worth is all aboot, its like hes never made an investment before, thinks everyone is out to buy the latest and greatest hardware year after year? lol bring yourself back to reality there buddy boy
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|I personally bought a new PC to be able to install my new version of Windows 7 Signature Edition I received for having a Windows 7 Party. I also bought 4 new Acer One Netbooks for my 4 children. What you call a menace, I call "just what the doctor ordered!" Perfect size, power and functionality for my 9,10,11,and 12 year olds. I also kicked in a new web cam one new mice and some mouse pads all for less than $1500 bucks. Contrary to popular believe, all should not be expensive.
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|I agree totally. We have to feel sorry for those consumerism wh***s out there who have to constantly get their "New and Improved!!!!" fix.
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|What happened after the 9-year old was born? You were on such a roll!
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|well, i didn't buy a new PC, i did however buy a new Windows 7 ;) brought my oldest PC back to good health and saved me cash in the process
let me just say this, PC sales will be steady and Microsoft ain't having a bad day soon
'No thanks to Windows 7' really? screw off with the loaded wording when theres no reason for it, you could simply say PC users aren't sheep, not even when it comes to a product they like.
Windows 7 did not make me go out and buy a new PC, why the heck would it? i'm not throwing cash away here
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|You're right on that. I have done the same as you on my laptop. The only reason of buying a new desktop is that after 8 years, I had decided my Dimension a well deserved rest. OTOH, there is no way in hell that I would a buy a new computer with Vista on it...
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|i built a PC in 3/2007 with vista, works great! Vista def works w/ no problems lol seriously, everyone is crazy
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|Vista became good. Windows 7 is better.
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