Overall Canadian PC market sluggish in Q2 but future looks more optimistic as Mini Notebooks surge

August 20, 2009

TORONTO, Canada, August 20, 2009 – The overall Canadian Client PC market (including Desktop and Portable PCs, but excluding x86 Servers) performed very close to forecast, with unit volume in the second quarter down 14.6% over the same period last year and down 12.0% from Q109, to reach 1,189,273 units shipped. The final numbers in the second quarter were slightly worse than the -14.0% achieved in Q109 and the fewest shipments since Q2 2006. Portable PC shipments performed slightly higher against projections, growing 9.9% YoY on 728,658 units (compared to forecasted growth of 8.3% YoY). As expected, the impact of the overall economic climate is accelerating the decline of desktop PC shipments. For the quarter, desktop shipments were down 36.8% over the second quarter in 2008.

Historically, the second quarter is usually the weakest quarter of the calendar year. This, along with the bottoming out and stabilized rate of decline, has hopefully indicated that the market has reached the lowest point and is poised to rebound. PC vendor share highlights include: " HP continued to hold on to the top share in the overall Client PC market in the quarter, with 22.1% share, despite YoY unit growth of -25.3%. The competition for the top spot in the overall Canadian PC market is still very tight, with Dell trailing HP by only 1.5 percentage points garnering a 20.7% market share. " For the first time, Apple broke into double digit market share with a 10.0% take of the overall PC client market. This was supported by very strong growth in portables, with Apple growing 24.8% YoY. " For the second consecutive quarter, Acer took the top share in portables with 21.4% of the market. Acer's performance comes from the strength of their Mini Notebook offerings, which the vendor currently dominates with a 57.5% market share. Unit shipments into the SMB space have recovered strongly from a very weak Q1 growing 23.6% YoY compared to a 3.7% pullback in the first quarter. Of special note, consumer portables enjoyed a double digit YoY growth for the 24th consecutive quarter. The explosive demand for Mini Notebooks continued to surge ahead after a slight pull back in the first quarter. Mini Notebooks ended the quarter with record unit volume of 114,560 units. Mini Notebooks are growing at an impressive 219.6% YoY. The adoption of the Mini Notebook form factor into the commercial space is continuing to flourish with commercial penetration at more than 25% of the units shipped.

"The second quarter has clearly indicated a shift in purchasing patterns, with Customers either buying low cost notebook PCs, including Mini Notebooks, or choosing Apple products," said Tim Brunt, Senior Analyst Personal Computing and Technology for IDC Canada.

The overall desktop PC market continued its rapid decline with a -36.8% YoY growth. Demand for desktops has plummeted -42.9% in the consumer space and a whopping -37.4% in the SMB space. The white box space continues to decline dramatically down 52.8% YoY. "Channel margins have improved significantly for desktops, but the overall market for desktops is becoming more specialized and focused as the transition to mobile computing intensifies," Brunt said.

The overall consumer segment declined 12.9% YoY. This was hit hardest by the 42.9% drop in desktops, but held up with the 13.4% growth in portables. The success in the consumer space is directly attributed to the increasing demand generated by Mini Notebooks.

"Overall the second quarter had to be disappointing for most manufacturers, but the end of the year and into 2010 certainly looks more optimistic than it did just 3 months ago," said Brunt.

For more information or to arrange an interview with Tim Brunt, please contact:

Joanne Haywood

VP Marketing Services

IDC Canada

(416) 673-2284

jhaywood@idccanada.com

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Contact

For more information please contact:

Tatiana Abramova
Marketing & Sales Operations Specialist
Phone: (416) 673-2299
E-mail: tabramova@idccanada.com