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To: Johnny Canuck who wrote (38959)	3/11/2003 6:12:15 PM
From: Johnny Canuck	Read Replies (1) \| Respond to of 71266

Note Number: FT-19-5391 War and Economic Fears Dampen 2003 PC Sales Forecast 11 March 2003 George Shiffler III \| Kiyomi Yamada PC unit sales for 2003 will grow almost 7 percent, according to Gartner's latest forecast of worldwide PC sales. However, the threat of war has hurt the global economy, which adversely affects PC purchases. Downloads 113633.pdf (14.7KB) Reference: Topics Event On 10 March 2003, in its latest forecast of the worldwide PC market, Gartner Dataquest projected that PC shipments (desktop and mobile units) will grow 6.6 percent in 2003 and 11.4 percent in 2004. First Take Gartner remains cautious in its outlook for the global PC market, clouded by economic and political uncertainty related to possible U.S. military action against Iraq. Gartner believes such uncertainty has helped to stall the global economy and raise doubts about a recovery. These economic jitters, in turn, impair PC sales by depressing sales among first-time buyers and replacement sales for aged PCs. In February 2003, Gartner developed three preliminary PC forecast scenarios based on assumptions about the outcome of the U.S.-Iraq standoff, its impact on the global economy and the potential consequences for the global PC market. In those scenarios, Gartner forecast that 2003 PC unit sales would grow within a range of 1 percent to 12 percent, most likely 7.9 percent. This updated Gartner forecast falls within that range but is marginally more pessimistic in light of recent developments. A PC market recovery remains inexorably linked to a general economic recovery. Such a recovery would undoubtedly help revive sales to first-time buyers. And it would likely stimulate replacement sales. Gartner believes a large pool of installed PCs, purchased in 1999 and 2000, are due for replacement. Unfortunately for PC vendors, these PC owners are likely postponing replacement — extending the lives of their PCs — in light of the weak and uncertain economy. Vendors should continue to expect modest sales in the first half of 2003 and anticipate healthier sales growth in the second half of 2003, driven by revived first-time sales and stronger replacement demand. However, any sales upturn must rely on the timing and strength of a general economic recovery. Therefore, Gartner recommends that vendors build in adequate operational flexibility to cope with a variety of potential 2003 market outcomes. Analytical Sources: George Shiffler and Kiyomi Yamada, Gartner Research Recommended Reading and Related Research “1Q03 Update: Global PC Forecast Scenarios, 2002-2004" — A preliminary PC forecast study with three possible scenarios. By Kiyomi Yamada, George Shiffler and Charles Smulders “Economic Outlook, 1Q03: War Worries and Other Concerns" — Gartner's latest economic outlook report. By George Shiffler (You may need to sign in or be a Gartner client to access all of this content.)