Light at the end of the tunnel for consumer electronics?

Market research firm Gartner Inc. is predicting that the consumer IT sector should begin to recover as early as the fourth quarter of this year, with sustained recovery emerging in the second half of 2010. PC shipments are on pace to be six-percent lower in 2009, coming in at a projected 274 million units; however, the company believes the PC market has essentially bottomed out and should post positive growth in the last quarter of the year.

Reduced prices for new PCs and increased demand for lightweight notebooks, netbooks and smart phones are buoying the consumer electronics industry. In fact, mobile phones are projected to be the first to see a sustainable recovery in the first half of next year, according to the company. Mobile PC shipments for 2009 (notebooks and netbooks) are expected to increase 4.1 percent over 2008, reaching 149 million units worldwide. Comparatively, shipments of desktop units are predicted to be down 15.7 percent, due both to consumers' growing preference for portability, and business' reluctance to upgrade IT assets during the recession.

A particularly bright spot in this trend involves Acer, as the Taiwanese manufacturer is poised to overtake Dell this year, snatching the number two spot for PC sales. Thanks in large part to a 2000 shift in company strategy to focus on portable computer and retail partnerships, Acer's market share grew to 11.6 percent in the first quarter of the year — within striking distance of Dell's declining 13.6 percent.

Also on the horizon, the much-anticipated arrival of Microsoft's Windows 7 operating system is unlikely to jumpstart sales of new units and PC upgrades, unlike the release of previous operating systems. Although most PC users are eager for a replacement for the widely-panned Vista OS, Windows 7 utilizes virtually identical system requirements, meaning no new hardware is necessary for the upgrade.

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Source: Resource Recycling, July, 2009