Public sector drop in spend affects PC sales

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Public sector drop in spend affects PC sales

Market research company IDC slightly lowered its forecast for growth of PC shipments worldwide today, as a result of a significant decline in government and education spending, despite signs of life among enterprise PC customers.

Last December, IDC predicted PC shipments would grow 8.3% in 2003. The forecast for growth in worldwide shipments this year now stands at 6.9%, reflecting a sharp dropoff in public sector IT spending, said Roger Kay, director of client computing at IDC.

"The public sector dropped off rather dramatically because the tax receipts were lower in 2002. Budgets are severely constrained, and the last flush of public spending was the third quarter of 2002," he said.

The uncertainty around a possible war in Iraq and the cautious outlook in other parts of the world are helping to stifle growth, he added.

Corporate spending, at least among enterprises, appears to be picking up. The long-awaited PC refresh cycle is starting to gain steam as companies examine their ageing infrastructures and pick up much more powerful systems for a relatively cheap price.

But the uptick in enterprise spending has not been accompanied by increased spending among small and medium-sized businesses, and has not been enough to offset the decline in public-sector spending.

Shipment value is expected to decline 1.8% in 2003, reflecting the further erosion of average selling prices among PC suppliers, Kay said.

Commercial growth is expected to be weaker in the US, compared with the rest of the world. US corporate PC spending is forecast to grow 2.9% while worldwide commercial growth comes in at 6.5%.


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