FORRESTER: ONE BILLION PCS IN USE BY THE END OF 2008

FORRESTER: ONE BILLION PCS IN USE BY THE END OF 2008

New report forecasts more than two billion PCs worldwide by 2015

By the end of 2008, there will be more than one billion personal computers in use worldwide, according to a new report from Forrester Research, Inc. (Nasdaq: FORR). With PC use growing rapidly in emerging markets and high-profile programs in place to reach previously untapped markets, Forrester predicts that there will be more than two billion PCs in use by 2015, representing more than 12 percent compound annual growth rate (CAGR) between 2003 and 2015.

While it took 27 years to reach one billion PCs, Forrester says it will take only five years to reach the next billion, due to advancing technology, lower prices and global demand on the part of a technology-aware population. According to Forrester, the emerging Brazil, Russia, India, and China (BRIC) market will account for more than 775 million new PCs by 2015.

“There is nothing more important to the long-term health of the technology industry — and personal technology in particular — than the ability to deliver relevant, accessible and affordable technology to the billions of people worldwide who have not been exposed to it, said Forrester Research Vice President and Research Director Simon Yates. “The industry can probably survive selling incrementally better hardware and software to the people who already have technology in their lives, but the vast majority of growth in the PC and related industries will come from emerging markets.”

There is unpredictability ahead, however, according to the Forrester report. Vendors are used to the predictability of buyers in mature markets, but high volume launches into emerging markets are risky. Vendors won’t have the luxury of introducing products on a small scale to test the market before going into full production because the economics will force suppliers to focus on bringing volume to market more quickly at much greater risk.

“There are risks,” said Yates. “It is safe to assume that life cycles will be longer in emerging markets. Vendors, accustomed to mature markets where the average life cycle is between four and five years, will need to have a deep understanding of how to work in these markets and, with less of a market for replacement PCs, will need to band together to scale production for these emerging regions.”

The Forrester report “Worldwide PC Adoption Forecast, 2007 To 2015” also lauds Microsoft Unlimited Potential, the Intel World Ahead Program, AMD 50×15, and OLPC for their efforts in reaching untapped markets, but notes that other major system vendors need to get involved and demonstrate similar corporate citizenship in order for the PC industry to scale production enough to ship five times the number of systems at one-fifth the cost and arm these emerging markets with the low-cost product required for the PC market to take off.

The report is currently available to Forrester RoleView™ clients and can also be purchased directly at http://www.forrester.com/Research/Document/0,7211,42496,00.html.

About Forrester Research

Forrester Research, Inc. (Nasdaq: FORR) is an independent technology and market research company that provides pragmatic and forward-thinking advice to global leaders in business and technology. For more than 23 years, Forrester has been making leaders successful every day through its proprietary research, consulting, events, and peer-to-peer executive programs.

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