Canadian PC shipments fall for the first time

The Canadian personal computer market suffered its first-ever year-over-year decline in the second quarter of 2001, according to data released Tuesday by International Data Corporation Canada.

IDC reported a decrease in PC unit shipments of 5.1 per cent from Q2 of 2000 to Q2 of 2001. It is the first year-over-year decline IDC has reported since it began monitoring the Canadian PC market in 1984, and John Stanisic, a hardware research analyst for IDC Canada, said the PC market was a growing one in the years previous as well.

Hardest hit in the most recent quarter was the consumer-branded PC market, which was forced to absorb a year-over-year decline in shipments of 13.8 per cent. This follows a decline of 9.6 per cent in Q1 of 2001, the first quarter ever in which consumer branded PCs declined year-over-year.

“In the consumer market, we’re hitting saturation,” said Stanisic. “Fifty-eight per cent of households have at least one PC and there’s always going to be at least 30 per cent that doesn’t need or want a PC in their homes.”

Stanisic said consumers are also experiencing the phenomenon of “good enough computing,” where users find older systems are powerful enough to meet their needs and newer models are unnecessary, even if their price tags have fallen.

“On their own, price isn’t a big enough incentive to go out and buy,” Stanisic said.

Life cycles have lengthened in both the consumer and commercial markets, where the average life span of a PC has grown from three to three-and-half years since 1997.

“Corporations are holding on to their PCs for a longer amount of time,” said Stanisic, adding that a lot of companies made purchases to coincide with Y2K, making their systems relatively current.

Commercial shipments, which in Q1 of this year kept the overall PC market in growth territory by posting a year-over-year increase of 7.2 per cent, were relatively flat in the second quarter of 2001.

Canadian businesses, tentative because of the economic climate south of the border, are cutting back on information technology expenditures, Stanisic said. He added it is much easier for businesses to cut back on purchases of notebooks and desktops than servers, which grew 8.3 per cent year-over-year.

But servers account for just three per cent of the total PC market, meaning their shipments had a relatively small impact on the overall totals. As a whole, desktop shipments were down 6.1 per cent from the second quarter of 2000 to the second quarter of this year, and notebooks dropped 2.3 per cent year-over-year.

Where individual companies are concerned, the two notables were Dell Computer Corp. and Apple Computer Corp. Dell, which finished second behind IBM Corp. in total shipment for Q2 of 2000, shipped 127,656 units in the second quarter of 2001 to surpass Big Blue (and its 117,695 shipments).

“Dell did well because of its aggressive pricing strategy,” Stanisic said, adding that Dell won a number of large corporate contracts in the first quarter of 2001 and began shipping those units in Q2.

On the strength iBook shipments, Apple climbed into the top five of PC vendors in Canada. Apple shipped a total of 27,743 units, down 21.4 per cent year-over-year, but up 13.9 per cent from the first quarter of 2001.

Stanisic expects corporations to start replacing 1998 systems in the latter part of this year, but said the purchases could be delayed by as much as a year if the economy doesn’t improve.

“As long as (the systems) are still working, if you’re not sure where the economy is going, it’s not so hard to hold on to those PCs,” Stanisic said.

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