Outlook dims for Malaysian PC market

• Malaysian PC market dipped 19% to 893,000 units in Q2.
• IDC has reduced its upcoming third quarter PC forecast to single digit growth.

THE Malaysian PC market registered a sharp sequential decline of 19% to 893,000 units during the second quarter of this year, according to the latest IDC Asia Pacific Quarterly PC Tracker report.

The research firm said the dip in the market was partially due to the substantially lower shipment volume of the government's Malaysian Communications and Multimedia Commission (MCMC) 1Million Netbooks program.

The prior phase of the program, which was delivered in the previous quarter, over 300,000 units were shipped as compared to just under 200,000 units in the second quarter.

In addition, the report revealed that retail activity was exceptionally low, with end user spending waning and consumer notebooks facing intense competition from tablet and smartphone devices for wallet share.

Excluding the MCMC mini-notebook project shipments, the retail consumer segment dropped 8% quarter-on-quarter (QoQ) in 2Q12 as consumers prioritized household necessities over IT spending.

According to Ng Juan Jin, market analyst for Client Devices Research at IDC Asia Pacific, on the supply side, channels adopted a ‘just-in-time’ approach to bringing in stocks in this uncertain climate to ensure that there were no large amounts of aging inventory going into the third quarter.

“We have observed that after months of aggressive price wars by multinational companies, marketing overkill and increasingly ineffective PC fairs, consumers have become apathetic, leading to slower movement of units out of channels,” said Ng.

The commercial segment remained flat QoQ in second quarter of this year, registering a total of 194,000 units shipped.

"While this quarter's sluggish movement in the commercial space could be attributed to seasonality where enterprises and the public sector hold off on PC purchases, the outlook for the second half of 2012 does not look promising as well,” said Ng.

He added that bids for large government projects that are usually observed in the second quarter have been few and far between this year.

“On the enterprise side, there is little optimism given the bleak worldwide economy which in turn affects IT spending of vendors' enterprise customers,” he added.

As a result, IDC has reduced its upcoming third quarter PC forecast to single digit growth as feedback from MNCs indicate yet another slow quarter for the retail market.

For the commercial segment, shipments are expected to pick up marginally in the second half of the year as Central Contract Education shipments from the public sector begin to roll out in the third quarter.

Ng added that this is also partially because of the Windows 8 effect.

"It is likely that channels will hold off on bringing in large amounts of shipments in anticipation of the Windows 8 launch. But once the embargo on Windows 8 models is lifted on October 26, channels should resume regular loading levels to cater to pent-up demand from the consumer segment," he said.