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Crunch to sales crash
By Martin J Young
HUA HIN, Thailand - This year will see the steepest decline in personal
computer (PC) sales in the industry's history, according to data released by
industry research firm Gartner this week. A drop of 11.9% to 257 million units
far exceeds the previous worse decline, of 3.2% in 2001 following the burst of
the dot-com bubble.
"The PC industry is facing extraordinary conditions as the global economy
continues to weaken, users stretch PC lifetimes and PC suppliers grow
increasingly cautious," Gartner research director George Shiffler said.
Emerging markets are likely to see shipments fall by 10.4%, while mature
markets are expected to see a 13% decline.
Economic woes and shrinking GDP's will weaken sales across the globe as
businesses and individuals hold on to existing computers for a little longer as
opposed to upgrading or replacing
them. This of course will have a knock-on effect on the software industry,
which relies on more powerful machines to run the latest versions of
applications and operating systems.
It's not all doom and gloom though, as mobile PC shipments are expected to grow
by 9% over last year, reaching 155.6 million units. This still does not offset
the drop in desktop sales, at a 31.9% decline from 2008.
The popularity of cheaper, lower spec, sub-US$500 mini-laptops, or net-books,
is expected to increase, so those companies with a slice of this market are
likely to come off a little better than ones that are ignoring it. Two
contrasting examples would be Taiwan's AsusTek, with its popular Eee PC
mini-laptops, and Apple, which still refuses to entertain the budget mobile
computer market.
The effect of the report rippled across the tech pond on Monday as stocks in
AMD, Intel, Microsoft, Hewlett-Packard and Dell all dropped. Semiconductor
sales also dropped in January, to $15.3 billion, down 28.6% from a year earlier
and 11.9% from the previous month. Worldwide revenue from microprocessors, an
industry that drives the global PC market, is expected to fall by 24.1% from
2008 to $194.5 billion.
Company executives and industry analysts expect the global economy and
information technology industry to improve in 2010 but it has to stop falling
first.
Hardware
Apple refreshed its desktop lineup this week with a number of additions to its
product range. Two new configurations emerged on the Mac Mini line with
entry-level machines now shipping with 2.0 GHz Intel Core 2 Duo processors and
integrated Nvidia GeForce 9400M graphics chips, 1-gigabyte of memory and a
120-gigabyte hard disk. One of these baby Macs will set you back $599, or you
can opt for twice the RAM and a larger hard disk for $799, they are still far
more expensive than the equivalent spec PC but we expected that all along.
The popular iMac all-in-one computer has been tweaked under the hood and now
weighs in at a starting price of $1,199, offering a 2.66 GHz CPU with 2
gigabytes of memory, an Nvidia GeForce 9400M GPU, 20-inch display and 320
gigabytes of storage. The top of the line iMac offering more of all of the
above is priced at $2,199. At the top of the pile is the professional level
machine, the Mac Pro, which features Intel's Nehalem Xeon processor and plenty
more goodies. It stacks up at $2,499 which may seem a lot but it is still $300
less than the previous entry-level Big Mac. The Big Daddy Mac Pro won't leave
you any change from $3,300 so competitive pricing is definitely not a strategy
here.
Apple aficionados were not amused at the latest offerings from their divine
digital leaders and proceeded to open the floodgates on the Macworld website.
Many stated that the wily marketing and price increases were deplorable in the
current climate and a few even threatened to switch to the dark side and buy a
PC, quoting performance and pricing on custom rigs using AMD's Phenom II
processor as a comparison.
Industry
Microsoft's European woes took a turn for the better this week as the European
Commission (EC) loosened the digital noose and relaxed its monitoring of the
software giant. Just two months ago, the company was facing the wrath of the
European Courts for anti-competitive practices by bundling Internet Explorer
with Windows. The claim was that the company was taking the choice from the
customer.
But only this week, the EC stated that Microsoft's competitive behavior has
improved and that the commission will be recalling full-time observations of
the company in compliance with a 2004 antitrust ruling against the US software
firm. This doesn't mean that Microsoft is off the hook. There is still a
minefield of legal complaints against the company, which, despite the recent
decision, doesn't seem to be holding back on its monopolizing instincts.
Science
The news from the stars this week has been a little rocky. A space rock, or
asteroid, came a little too close for comfort on Monday as it skimmed past
Earth at a distance of only 70,000 kilometers, just over twice the distance of
the highest Earth-orbiting satellites.
The asteroid, named 2009DD45, was around 40 meters wide, a little larger than
the one that was thought to have exploded over Siberia in 1908, causing the
"Tunguska Event", which leveled 2,000 square kilometers of forest.
Astronomers and scientists who have been tracking asteroid 2009DD45 since late
last month said it posed no threat to the Earth. Objects of this size pass
close to the Earth around twice a year but this one was one of the closest
recently recorded - it would not have caused a global catastrophe had it hit
but it would have made a mess of wherever it struck.
The next known asteroid forecast to pass closer to the Earth is called 99942
Apophis - that will be a mere 32,000 kilometers away, 270 meters in diameter,
and will be here in 2029 ... lets hope it doesn't get a little bump on the way.
Martin J Young is an Asia Times Online correspondent based in Thailand.
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