PC industry facing worst slump in history

The PC industry is this year facing its worst slump in history, with shipments to fall 12% to 257 million units, Gartner has warned.

The research firm also revealed that global server sales fell 15.1% in the fourth quarter while mobile phone shipments slid 4.6%.

Gartner said the PC slump would dwarf the previous record in 2001 when unit shipments contracted 3.2%.

"The PC industry is facing extraordinary conditions as the global economy continues to weaken, users stretch PC lifetimes and PC suppliers grow increasingly cautious," said Gartner research director George Shiffler.

Sales are even set to decline in emerging markets, Shiffler said. Until now, PC sales have grown every year in these markets - the slowest recorded market growth was 11.1% in 2002. But in 2009 sales in emerging markets are due to decline by 10.4%.

This weakening demand will cause significant knock-on effects for the semiconductor industry, according to research from IDC. The market is set to decline 22% in 2009, due to double-digit shipment declines and price erosion.

"With demand visibility low, utilization rates at frozen levels, and supplier inventories growing because of deteriorating demand targets, IDC does not expect year-over-year growth for semiconductor revenues until the second quarter of 2010," said Mario Morales, IDC's vice president for semiconductor research.

The decline will affect Asia as well as the US and Europe, IDC said, and the global market will not recover until 2010.

Gartner said the mobile phone sector boosted sales 6% for the year, but vendors sold just 314.7 units in the fourth quarter, down 4.6%.

Nokia shipped 118.8 million phones, down from 133.19 units a year earlier, and saw its market share slip from 40.4% to 37.7%.

No. 2 handset maker Samsung increased both market share and gross shipments, selling 57.5 million terminals, up from 44.35 million a year earlier to lift its market share 4.9 points to 18.3%.

In the server market, revenue fell in all regions except Japan. Sales were down 20.6% in Europe, the Middle East and Africa and 12.5% in Asia-Pacific.

"The weakening economic environment had a deep impact on server market revenues in the fourth quarter as companies put a hold on spending across most market segments," said Heeral Kota, a senior research analyst.