After stagnant year, PC market tipped to grow 50% by 2006

The New Zealand PC market is set to grow by 50% to almost half a million units over the next five years, says analyst firm IDC.

The New Zealand PC market is set to grow by 50% to almost half a million units over the next five years, says analyst firm IDC.

After the global PC market contraction in 2001, growth is set to resume thanks to a combination of the three-yearly upgrade cycle and the convergence of PCs with handheld devices and gaming technologies.

Hardware analyst Darian Bird says Y2K issues brought a surge of buying in 1999, leaving a void for 2000-01. A maturing market and the global economic slowdown worsened the effect.

In New Zealand, 332,000 units were sold in 2001, compared with 2,008,000 in Australia. There was no growth in PC sales in this country and the market’s value fell 3% in US dollar terms thanks to cheaper prices — though this was counteracted slightly by our weaker dollar.

Bird says “pockets of potential” remain in the marketplace, with portables leading the way thanks to their improved performance for price, diversity of range, better technology and an untapped consumer market.

Overall, IDC predicts the New Zealand PC market will grow annually by 7.8% a year to around 480,000 units in 2006.

Within that, the consumer desktop market, currently just over 100,000 units, should enjoy compound annual growth of 4.5% over the next five years. The commercial desktop market, currently just over 150,000 units, should enjoy larger growth of 8.9% a year. And the much smaller notebook market, around 20,000 units, should enjoy a compound growth rate of 9.7%, approximately doubling in size by 2006.

The standard Intel architecture market, currently a few thousand units, will enjoy 10% annual growth, IDC says. Already, Bird says, local assemblers are moving from low-margin desktops towards making handheld devices. Handheld shipments from overseas will also be driven by the hardware being fast enough for applications like email, internet and word processing. And in today’s multimedia world, such devices also offer MP3, digital cameras and video. Demand for them won’t happen overnight, but when it does they will need software and services to support them, Bird says.

At present, for example, the smart handheld device market is immature, says IDC, with low penetration (some 18,000 pen-based units were sold in New Zealand in 2001) and undefined standards in a niche market. They currently use wireless systems like CDMA but the introduction of third-generation telecomms technology should fuel their use.

Dedicated gaming devices like PlayStation 2, Nintendo and Microsoft’s Xbox, already launched overseas and due here this year, will boost the portables market. Microsoft last week slashed the prices of the Xbox in several countries to stimulate demand.

Bird says online gaming will also take off in 2004-05 as people see it as a substitute for gameboxes. In turn, PS2, for example, will be used for other activities such as computing.

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