Kuala Lumpur, 12 September, 2012 -- According to IDC's Asia/Pacific Quarterly PC Tracker, the 2Q12 Malaysia PC market registered a sharp sequential decline of 19% to 893,000 units.

The dip in the market was partially due to the substantially lower phase 3B shipment volume of the government's Malaysian Communications and Multimedia Commission (MCMC) 1Million Netbooks program. In phase 3A, which was delivered in the previous quarter, over 300,000 units were shipped as compared to just under 200,000 units in 2Q12. Retail activity was exceptionally low as well as end user spending waned and consumer notebooks faced intense competition from tablet and smartphone devices for wallet share.

Excluding the MCMC mininotebook project shipments, the retail consumer segment dropped 8% quarter-on-quarter (QoQ) in 2Q12 as consumers prioritized household necessities over IT spending in Q2. 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. Learning from past experiences, this ensured they were not left holding large amounts of aging inventory going into Q3." IDC observes that after months of aggressive MNC price wars, marketing overkill and increasingly ineffective PC fairs, consumers have become apathetic, leading to slower movement of units out of channels.

On the other hand, the commercial segment remained flat QoQ in 2Q12, registering a total of 194,000 units shipped. Juan Jin says, "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. Bids for large government projects that are usually observed in Q2 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."

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IDC has reduced its upcoming Q312 PC forecast to single digit growth as feedback from MNCs indicate yet another slow quarter for the retail market. This is partially because of the Windows 8 effect. Juan Jin adds, "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." On the commercial side, shipments are expected to pick up marginally in 2H12 as Central Contract Education shipments from the public sector begin to roll out in Q3.

For further information on the findings contained in this report, please contact Harsha Sundararaman at +65-6829-7716 or hsundararaman@idc.com

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