Secondary PC market growing : Gartner

Recycling legislation makes it expensive to discard old PCs

There is an increasing demand for used PCs in the emerging markets. This has led to the creation of a thriving secondary PC market. At present, for every two new PCs shipped to the mature markets in 2005, one secondary market PC will be resold.

The increase in the availability of used computers is fuelled in part by recycling legislation that makes it more expensive to discard old PCs. But this is also giving rise to an industry that exports PCs merely to evade recycling laws.

According to Gartner, a secondary market PC is one that has been used for more than three months by its primary or initial user and then made available to another user for secondary use. The US, Japan and Western Europe are the largest suppliers of secondary PCs. These are in great demand in Eastern Europe, West Asia, Africa, Latin America and Asia Pacific.

"The demand for secondary PCs continues to exceed supply, providing potentially lucrative opportunities for specialised intermediaries and resellers or vendors looking to resell used PCs," said Meike Escherich, principal analyst in Gartner's client platform research group.

Currently, one in 12 PCs in use worldwide are secondary PCs. In 2004, 152.5 million secondary PCs were shipped. It is estimated that 36 per cent of secondary PCs or 55 million PCs, were for reuse. These secondary machines will provide a strong base from which the used PC market will grow.

Unlike in mature markets, operating system intellectual property rights are rarely followed in emerging markets and this allows a lower resale value for secondary machines.

According to Gartner, the secondary PC market will continue to grow during the next several years in the home and professional markets, sparked by replacement activity, longer system life and new-seat opportunities in low-cost regions.

Import tariffs, high transportation costs and a drop in the price of new PCs, in addition to environmental evasion, are preventing used computers from finding buyers. Gartner found that only one in six PCs dedicated for reuse ends up on a desk in developing market.

Currently, about eight per cent of the world's computers have had a prior owner, but this figure is rapidly increasing. For 2009, Gartner has projected that the number of used PCs shipment will increase to nearly 110 million.