The personal computer was beginning to look like yesteryear’s gizmo, a technology relic overshadowed by smartphones, e-readers and, lately, Apple’s iPad. But the old beige box has proved remarkably resilient and relevant.
The PC industry shrugged off the recession last year to post a surprising rise in worldwide computer sales. In a sign of the vibrancy of the market, companies like Google and Nokia — not traditionally makers of PCs — have jumped into the competition; Google is developing an operating system to compete with Microsoft’s Windows, and Nokia now sells a laptop.
Meanwhile, the early indicators for this year show PC sales surging. On Tuesday, Intel, the world’s largest PC chip maker, reported the highest first-quarter sales, $10.3 billion, and profit, $2.4 billion, in its history. After digesting Intel’s results, a number of Wall Street analysts said on Wednesday that the PC market could grow as much as 25 percent this year.
Also on Wednesday, the research firm Gartner said worldwide PC shipments climbed by 27.4 percent in the first quarter compared with a year earlier, surpassing expectations by more than 5 percent.
While experts engage in a fierce debate about the health of the overall economy, the technology sector has marched on in recovery mode. Intel, as a major supplier, tends to provide an early glimpse into the overall health of the sector and with its latest results has posted sales figures that surpass pre-recession levels.
Consumers have led the PC charge through their fondness for netbooks, the cheap, tiny laptops that were introduced about three years ago. Rather than eating into laptop sales, these devices have attracted consumers to a new category of complementary computers. And now Apple, with its iPad, and other companies are seeking to lure even more buyers with their interpretations on a thinner, lighter computer.
Intel officials attributed the first-quarter results to record purchases of laptop chips and of more expensive, faster chips. At the same time, they said, large corporations, many of which have four-year-old computers, have finally started upgrading their aging machines.
“We are seeing signs of life in the corporate market,” said Stacy J. Smith, the chief financial officer at Intel, during an interview.
Last April, Paul S. Otellini, the chief executive at Intel, proclaimed that the PC industry had hit bottom in early 2009, and would recover throughout the year. With sales across the technology sector at record lows and the worldwide economy mired in a slump, Mr. Otellini’s optimism was questioned as premature.
Just one month earlier, Gartner had forecast that PC sales would fall by 12 percent in 2009, which would have been their steepest decline in history.
Ultimately, global PC sales rose more than 5 percent in 2009. The PC market’s relative health stood in contrast to depressed markets for cars, cellphones, televisions and other goods used by people on a daily basis.
Even on tight budgets, consumers continued to buy laptops in large quantities and flocked to netbooks, which accounted for more than one-fifth of laptop sales in regions like Europe. Companies like Intel, Hewlett-Packard and Microsoft make less money from the low-cost netbooks, but the devices have kept shipment numbers high by creating a new niche for computers. About 95 percent of people buy netbooks as an additional computer rather than as a laptop replacement, according to Intel’s surveys of its customers.
Companies like Apple, H.P. and Nokia want to use trimmed-down, specialized versions of laptops as a way to offer people access to their content and software services, creating a deeper customer relationships.
“The hardware is a type of Trojan horse to give these companies access to consumers and their wallets,” said Ashok Kumar, a technology analyst with Rodman & Renshaw.
In addition to Google’s expected release of its PC operating system and Nokia’s laptop, both companies are also preparing competitors to the iPad, according to people who have been briefed on the companies’ plans but are not authorized to speak publicly about them.
It remains difficult, however, to draw any conclusions about the vibrancy of the PC market and the overall economy, some analysts say.
Roger L. Kay, a longtime PC industry analyst, said that in the 1990s, computers were often viewed as a leading indicator for the economy’s behavior. “Corporations would buy them to invest in higher productivity in the future,” he said.
But he warned that it was difficult in the previous decade to connect the health of the PC market to the health of the broader economy. PC sales, he said, “have slipped from leading to concurrent indicators.”
Mr. Smith from Intel said PCs had become such crucial devices to everyday life that they could withstand the gyrations of the economy better than most products and seemed to recover early.
“The telling data point is one from last year when the PC market bottomed out and then recovered quickly in comparison to things like TVs, cars and washing machines,” Mr. Smith said. “I can only take away that at least in this downturn, PCs were a leading indicator.”
Mr. Smith’s son learned about his father’s lofty view of the PC’s importance the hard way.
“Over the last decade, the PC has gone from an interesting device to a necessary device,” he said. “When I want to ground my son, I take away his PC for the night, not his TV.”