PC sales still sagging as market waits for Santa Claus

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IDC's has released its market report for the second quarter of 2009, and it contains little in the way of good news for beleaguered PC vendors. Worldwide PC shipments are down 2.4 percent year-over-year, as businesses and consumers continued to hold off on upgrades and new purchases. Adding to the misery was serious margin compression—aggressive discounting meant that the value of PC shipments declined by 19.1 percent during that period.

The one bright spot in the numbers was (wait for it)... netbooks. Except that the continued popularity of the sub-$400, low-margin, consumer-oriented netbook isn't really a bright spot—it's more like a rash that's symptomatic of the PC market's ongoing illness. The IDC report indicates that the desktop PC is in double-digit decline, but of course part of that decline is secular, the evidence of the long-term industry-wide shift from desktops to notebooks. Business portables, though, saw depressed growth rates at 16 percent.

Not having the full report, it's not clear what the seasonally adjusted picture is, but since we totally departed from normal seasonal patterns last year, this may not be at all informative. The big question, and the one that the entire industry is holding its breath for, is what will happen in the all-important third and fourth quarters.

The third quarter is when businesses worldwide do their upgrades, but most of them skipped them completely last year. As we've reported previously, a lot is riding on the widely expected return to seasonal upgrade patterns in this and next month. If this isn't panning out as we speak, then look out below. It's likely that much will depend on the state of the corporate credit market, which has largely recovered from last year by most accounts.

The fourth quarter is, of course, Christmas, which is when consumers do their upgrading. Again, everyone has their fingers crossed, but they may be disappointed. Consumers' use of revolving credit (credit cards, mostly) is still in relatively rapid decline, which means that very few consumers are going to put down plastic at Best Buy for a new PC.

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