Canadian PC market declines for first time

Canadians didn’t buy many computers this spring – resulting in the first ever decline in PC sales since market-watchers started keeping records, according a report released Tuesday.

The 5.1 per cent slide in Canadian PC factory shipments compared to the same time last year resulted from weak consumer sales that fell 13.8 per cent, and virtually flat commercial sales, concluded IDC Canada, the Toronto-based market research firm that commissioned the study.

Lacking seasonal drivers like holiday buying, or organizations burning off their yearly budgets, April to June is usually the slowest time of the year in PC sales and industry watchers had expected only “soft” growth, said John Stanisic, a hardware analyst with IDC Canada’s Toronto office.

However, even with a sluggish economy an actual decrease in sales, let alone a dip greater than five per cent, came as a surprise since the overall Canadian PC marketplace has never before shrunk, Stanisic said.

For now though, Stanisic said some Canadians can still benefit from the hardware industry’s woes.

“Because memory prices have fallen so low, it’s a great time for anyone to buy a PC or a standard Intel architecture server, and it has been for a while,” he said.

The Canadian sales pattern also mirrors a worldwide PC market that dipped 1.9 per cent from last spring’s figures, according to twin US-based studies released earlier this week by Gartner Dataquest Inc. and IDC (USA).

With 70 per cent of the global PC market based in North America, Europe, and Japan, all of which are suffering some degree of economic slowdown, negative growth rates began to look inevitable, said Todd Kort, a principal analyst with San Jose, Calif.-based Dataquest.

Among both Canadian and global vendors the only winner was Dell, who not only held on to first place in the market, but was the only hardware supplier to actually increase their market share.

“It’s fair to say that Dell is really on a roll, and it’s likely to continue for the remainder of this year at least. It’s only in times when component prices are stable, or even possibly rising (and both conditions are rather rare), that Dells’ s model does not work quite as effectively – and we don’t see that kind of scenario developing anytime soon,” Kort said.

The apathetic market is partly due to newer computers with so much memory that even updated operating systems do not tax the machines, so businesses and consumers are going longer between hardware updates, Stanisic said.

There is some light at the end of the PC sales tunnel six months or more down the road, Stanisic said, when the Windows XP, a revamped O/S that requires a great deal of computing power, hits the market and starts to drive the purchase of new machines.

Gartner Inc. is at IDC Canada is at