Research firm Gartner says PCs set to move to the tune of double digit growth but revenues will be flat. Their new study says PC unit shipments are set to 12.7% but they said accompanying revenues will grow just .5%.
The report went to say worldwide PC shipments are slated to hit 206.6 million units in 2005 with revenues totaling $202.7 billion. They said 2006 growth will be 8.7% and revenues will actually decline .4%, attributing the revenue losses to drops in prices of PCs.
“The quest for growth is forcing vendors to test the limits of PC price elasticity,” said George Shiffler, principal analyst for Gartner’s Client Platforms research. “The whole dynamic is compounded by the fact that buyers have increasingly come to expect sharp price declines.”
They suggested also that the average selling price (ASP) will continue to drop, likely to remain under strong downward pressure. “Mounting cost pressures will eventually slow ongoing ASP declines, especially if PC component prices firm,” Mr. Shiffler said. “However, as recent earnings announcements illustrate, vendors are facing strong competitive pressures. These pressures are only likely to intensify if unit growth slows. Vendors may have little choice other than to cut prices or offer more lower-cost, de-featured machines.”
One other major point is the strength of mobile computing. Mobile PC shipments are strong because buyers want that mobile hook up at their local coffee shop and with notebook computers getting cheaper and wireless getting better this market will continue to grow.
Really, this report just confirms much of what the industry already knows. Prices are going to continue to drop and while the high end product will stay high priced, your average customer will find these trends much to their liking.
John Stith is a staff writer for Murdok covering technology and business.
