Chicago (IL) - Market research firm Gartner predicts that PC manufacturers will be able to grow their business in the double digit-range in 2006, but should expect a substantial slowdown from the momentum the industry reached in 2005.
Gartner's estimate puts global PC shipments at 234.5 million units for 2006, which represents a 10.7 percent increase from 2005 shipments of 211.8 million. The preliminary forecast takes into account that desk-based PC replacement activity has peaked and will shortly subside. Replacement sales were the major driver behind 2005 sales, which posted a 15.5 gain over 2004 sales.
"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 group. "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."
Interestingly, Gartner's forecast contradicts industry voices. For example, Taiwan system builders believe that Dell, the world's dominant PC manufacturer, will see its shipments climb by up to 25% this year and memory builder Samsung told us recently that the company does not see a slowdown of its DRAM business - which is driven mostly by PC sales - arriving this year. Windows Vista is one of the factors the industry is counting on - and while many users will choose to upgrade their computer to accommodate the new software, others may opt to buy a new computer to run the operating system.
Gartner, however, isn't so sure that Vista will bring the impact PC builders are hoping for. "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," Gartner research director George 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."
According to Gartner, worldwide desk-based PC shipments are projected to grow just 1.9% in 2006. And even this low number gets worse, when mature and emerging markets are separated. Desk-based PC shipments to mature markets are predicted 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," Shiffler said. "Desk-based 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 desk-based growth and are forced to seek growth in other market segments."
Mobile PCs remain an opportunity for the industry, according to Gartner. Notebooks shipments are estimated 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%.
Gartner's cautious guideline for 2006 is reminiscent of the conservative outlook given for 2005. In early 2005, research firm IDC warned the industry that 2005 would bring a considerable slowdown over 2004. While 2004 posted a growth of 14.5% from 177.5 million 195.1 million units, 2005 would only see gains of about 10%, IDC predicted. By year end, growth came in at 15.5% and IDC's forecast was off by about 50%.