PC sales peak hits trough
Market set to slow down in 2005, analyst claims
The PC market in 2005 is set to slow down after peaking last year, according to the latest predictions from analyst Gartner.
Worldwide PC shipments are projected to hit 199 million units, a nine per cent increase over 2004. Global shipments in 2004 hit 183 million units, an 11.6 per cent increase over 2003. As expected, notebook sales are expected to drive growth in 2005.
Mobile shipments are predicted to jump by 17.4 per cent this year, while desktop PCs are set to grow at a modest 6.1 per cent - less than last year's double-digit growth.
Gartner believes the corporate replacement cycle for older millennium PCs peaked in 2004 and will drop off this year.
"Overall shipment growth is expected to slow this year as both professional and home-users wind down major replacement cycles," said George Shiffler, principal analyst at Gartner's client platforms research.
"We believe professional replacement activity peaked in 2004 and will decelerate sharply over 2005. While home replacement activity will continue to provide some strength to the market in 2005, it too is likely to slow by year-end."
However, Terry Fisher, business development manager for the HPC division at system builder Compusys, disagreed that the corporate desktop outlook is bleak.
"I'm not sure about the PC market growth falling off that fast. It's true we saw a lot of businesses upgrade last year on the PC side, but we think there are still companies out there that bought PCs in 2000 and continue to squeeze what they can out of them. Many will look to replace this year.
"Also, it's hard to justify the cost of laptops over desktops. You can get cheap laptops, but [desktops] are really cheap."
The shift towards mobile computing will continue in earnest again this year, thanks to falling prices and better services.
"Mobile PC unit growth should outpace desk-based growth considerably this year," Shiffler said. "There are a number of reasons for this, including falling system prices, enhanced wireless experiences and expanded multimedia functionality."
There is hope for the desktop PC market if new models can be transformed into digital media hubs, such as media centre PCs. Gartner is sceptical about the ability of PC manufacturers to pull it off, though.
Kiyomi Yamada, client platforms research analyst at Gartner, said: "Media PCs remain expensive, and suffer from spotty reliability and troublesome ease of use."