PC Revenues Expected To Dip This Year - InformationWeek

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PC Revenues Expected To Dip This Year

Gartner expects heated competition among manufacturers to produce price declines that spur growth over the near term in mature markets like the United States.

Worldwide revenues from PC sales are expected to dip this year as manufacturers drop prices to attract buyers, a research firm said Friday.

Revenues are expected to fall by 2.5 percent this year to $198.3 billion, Gartner said. Shipments, on the other hand, are expected to increase by 10.5 percent to 233.7 million units.

Gartner expects heated competition among manufacturers to produce price declines that spur growth over the near term in mature markets like the United States. Shipment growth, however, is expected to slow as the market for PC replacements becomes saturated.

Windows Vista, the next version of the Microsoft operating system, is not expected to have much impact on sales when it ships to consumers in January.

"Vista's eventual release next year could stimulate some added growth, but we remain skeptical of Vista's impact," Gartner analyst George Shiffler said in a statement.

Gartner expects price declines in emerging markets to spur shipment growth longer than in mature markets, primarily due to the number of potential customers without PCs, expanding economies and a growing number of PC ownership initiatives.

Emerging markets are expected to post solid double-digit growth during the next two years, while shipments in mature markets slow to mid to single digits, Gartner said.

During the holiday season, PC manufacturers are expected to have a difficult time competing for consumer dollars with consumer electronic makers, particularly makers of LCD TVs.

"The battle between PCs and LCD TVs in particular is likely to be especially intense over the holiday season given that LCD TVs will almost certainly be backed by aggressive holiday marketing and even lower prices," Shiffler said.

Even advanced mobile phones, which can access email and the Web, and play music and video, are expected to lure some people from buying low-end PCs, Shiffler said.

On Thursday, Gartner rival International Data Corp. said PC shipments for the second quarter grew by 9.8 percent to 52 million units. IDC expects the year to end with double-digit growth in shipments.

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