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PC growth to stall until 2010, reports says

The Canadian Press

MONTREAL — The Canadian market for personal computers isn't expected to reboot to positive growth until 2010 because consumers and businesses are delaying purchases and waiting for new technologies, says IDC Canada.

Desktop computers dragged down the market in the first quarter and the volume of netbooks — small mobile computers that allow users to surf the Internet and check e-mail — has levelled off, IDC said Tuesday.

“This year, the bottom has completely fallen out of desktops,” said Tim Brunt, IDC's senior analyst in personal computing and technology. “The market is demanding mobility.”

The overall desktop PC market declined by 27 per cent from last year, but on average a desktop PC now sells for more than $200 more than a portable personal computer, IDC said.

Netbooks continued to garner a larger share of the overall market for portable PCs due to their lower price, but unit shipments were down by 5 per cent from the fourth quarter, Mr. Brunt said.

Netbooks, also called mini notebooks, usually cost between $200 and $500, but can be found at even lower prices.

“They're really taking a price leadership role,” he said, adding that laptops also have to compete with the price of netbooks.

“Mini notebooks came along at an opportunistic time — a down economy and a low price point,” Mr. Brunt said from Toronto.

The overall PC market took a step decline in the quarter with unit volumes down 14 per cent over the same period last year to reach about 1.3 million desktops, laptops and netbooks shipped in Canada.

The most popular PC brands in Canada in first quarter were HP, Dell, Acer, Toshiba, Lenovo and Apple, Mr. Brunt said.

Canada didn't fare well globally in the quarter, Mr. Brunt said. In the United States, PC shipments were down just 3.4 per cent in the quarter with 14.9 million units shipped, he said.

“While the overall PC market continues to retreat, and the remainder of 2009 does not look optimistic, there is light at the end of the tunnel in 2010, where there are several factors that will drive the industry back to positive growth.”

Mr. Brunt said consumers and businesses are waiting for faster chip sets in PCs, Microsoft's new Windows 7 operating system, and different form factors. He added that small businesses will be looking to take advantage of the federal government's stimulus package before the end of the year.

Analyst Duncan Stewart said consumers used to have to pay more for a mobile computer, such as a laptop, than for a desktop.

“In the early stages of a technology, people pay a premium for smallness and portability but then as you figure all of that out, you realized that you don't need that much power for a little, portable device,” said Stewart, director of research, technology, media and telecom at Deloitte Canada.

But he said desktop prices will “hang in there” because people will buy them to do more things with them.

Despite a decline sales volumes in the first quarter, netbooks still have appeal.

Dell announced on Tuesday the launch of the Latitude 2100, a netbook specifically designed for students from kindergarten to Grade 12.

Netbooks will also be a source of revenue for wireless carriers with Verizon and AT&T in the United States offering them with multi-year contracts and some rebates.

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