Desktop PC sales to stagnate in 2006

By Stan Beer
Thursday, 09 March 2006 15:16

Market

Desk-based PC replacement activity has peaked and is expected to drop shortly, slowing PC growth in the process, according the latest research from Gartner.

Worldwide PC shipments are projected to total 234.5 million units in 2006, a 10.7% increase from 2005 shipments of 211.8 million units, according to a preliminary forecast by Gartner. However, the PC industry will experience slower growth in 2006 compared to 2005 when PC shipments increased 15.5%.

Gartner analysts said that while mobile PC growth remains strong, desk-based PC replacement activity has peaked and will shortly subside.

“We expect a steady decline in desk-based replacement activity over the next year,” said Mikako Kitagawa, principal analyst for Gartner’s Client Platforms research. “The impact will be especially dramatic in mature markets where new desk-based penetration is also slowing and mobile-for-desk-based substitution is increasing.”

Worldwide desk-based PC shipments are projected to grow 1.9% in 2006. However, there will be a sharp contrast between mature and emerging markets. Desk-based PC shipments to mature markets are forecast to decline 8.6%, while desk-based PC shipments to emerging markets are forecast to increase 19.5% in 2006.

“The next two years will produce a turning point for the PC industry,” said George Shiffler, research director for Gartner’s Client Platforms research. “Deskbased sales to mature markets such as the United States and Western Europe have been PC vendors’ mainstay up to this point. Vendors are likely to see a fundamental shift in the market as they come to grips with the steep decline in mature-market deskbased growth and are forced to seek growth in other market segments.”

Gartner analysts said there is added uncertainty for the PC industry in 2006 that could stall PC sales further this year. “Microsoft has not announced a precise release date for its new operating system named Vista, and Intel is in the process of rolling out a number of technical innovations in the face of strong competition from AMD,” Mr. Shiffler said. “End-user concerns about the availability and value of these new technologies could result in some buyers holding off PC purchases until later in 2006 or beyond.”

Mobile PCs remain a bright spot for the industry. Worldwide mobile PC shipments are forecast to grow 31.4% in 2006 with shipments to mature markets expected to grow 22.1% and shipments to emerging markets expected to grow 38.7%.