November 29, 2004 2:27 PM PST

Are PC makers poised for major hit?

As many as three of the top 10 PC manufacturers may be forced out of the global PC market by 2007, a new report by Gartner predicts.

The report, published Monday, said that lower demand for PCs between 2006 and 2008 will spur the next round of consolidation in the PC market. Earlier this month, Gartner cut its forecast for fourth-quarter PC shipments.

Dell, Hewlett-Packard and IBM rank as the world's top three manufacturers in unit shipments, while Fujitsu, Fujitsu-Siemens, Toshiba, NEC, Apple Computer, Lenovo Group and Gateway rank fourth through 10th.

Gartner predicts annual unit shipments of 11.3 percent and annual revenue increases averaging 4.7 percent between 2003 and 2005. Despite that relatively profitable period, 2006 will bring tougher times as demand for new PCs slows and competition between vendors increases, the research firm said.

Many businesses and consumers will have replaced their oldest computers by the end of 2005, completing the latest PC replacement cycle. As owners typically replace desktops every four years and notebooks every three years, that should leave demand slack between 2006 and 2008. That period will see average annual unit shipment and revenue growth slow to 5.7 percent and 2 percent, respectively, Gartner predicted. So-called emerging markets such as China will deliver the best growth during that time, but will be unable to offset slack demand elsewhere, the Gartner report added.

If the predictions hold true, the 2006-to-2008 time frame will make for better times than 2000 to 2002. The market contracted in 2001 and grew only slightly in 2002, leading to the blockbuster Hewlett-Packard-Compaq Computer merger. Micron Technology also sold its Micron Electronics PC arm, now called MPC Computers. Gateway, whose financial troubles began during that period, acquired eMachines in March and embarked on a massive restructuring.

Gartner said that lower revenue and unit shipment growth in 2006 through 2008 will be just as traumatic for manufacturers as it was in years prior.

The research firm stopped short of predicting which of the top 10 companies is most likely to stumble. Instead, it laid out several scenarios. Facing the potential of slower growth, some manufactures might acquire or merge with others, as HP and Gateway did, or firms

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desktop sales predictions
I read on MSDN that longhorn will need more powerful computers to make it run effectivly.

I thought that longhorn would be released by
Microsoft just in time to spur another sales
spike in desktops.
Posted by (2 comments )
Reply Link Flag
desktop sales predictions
I read on MSDN that longhorn will need more powerful computers to make it run effectivly.

I thought that longhorn would be released by
Microsoft just in time to spur another sales
spike in desktops.
Posted by (2 comments )
Reply Link Flag
My prediction
IBM will spin off it's PC line (Netvista, Intellistation, and Thinkcentre) and will keep it's Thinkpad laptops and maybe keep the Intellistation. HP will merge it's consumer Pavilon and Presario lines into one and keep it's business Deskpro. Gateway will only be selling Emachines. Dell will still be selling Dimension and Optiplex. The rest of major manufactures will be gone (bought or bankrupt) except for the enthusiasts market like Alienware, Velocity PC, Falcon Northwest. IBM and HP don't need to sell PCs. They make more on services and other equipment. Anyways, That's my prediction!
Posted by ledzep75 (53 comments )
Reply Link Flag
Probably
You're probably right on most counts. I actually believe Apple
might still be around, simply because they have a very loyal fan
base, and their demise has been predicted for over a decade
now, with nothing major really happening. The others rely on
Windows, but since Apple has their own OS, their fate lies much
more with them than the other manufacturers.
Posted by iKenny (98 comments )
Link Flag
My prediction
IBM will spin off it's PC line (Netvista, Intellistation, and Thinkcentre) and will keep it's Thinkpad laptops and maybe keep the Intellistation. HP will merge it's consumer Pavilon and Presario lines into one and keep it's business Deskpro. Gateway will only be selling Emachines. Dell will still be selling Dimension and Optiplex. The rest of major manufactures will be gone (bought or bankrupt) except for the enthusiasts market like Alienware, Velocity PC, Falcon Northwest. IBM and HP don't need to sell PCs. They make more on services and other equipment. Anyways, That's my prediction!
Posted by ledzep75 (53 comments )
Reply Link Flag
Probably
You're probably right on most counts. I actually believe Apple
might still be around, simply because they have a very loyal fan
base, and their demise has been predicted for over a decade
now, with nothing major really happening. The others rely on
Windows, but since Apple has their own OS, their fate lies much
more with them than the other manufacturers.
Posted by iKenny (98 comments )
Link Flag
Which one is right?
"world's top three manufacturers"
Is word "manufactureres" right to use?Except IBM other are not doing anything else but "assemle computer hardware" just like me and many other small builders...Don't recall that Dell is manufacturing anything themself?Maybe mouspads or what.
Well more of these companies get out of building computers will leave more work for us,smaller guys....So I welcome change anyday.
Posted by (32 comments )
Reply Link Flag
Definition of manufacturing
Dell, for the most part, purchases computer components and assembles them at their manufacturing facility. I think that is pretty well described in #1 and #2 below.

The question would be: "What does 'suitable for use' refer to?" Give me a video card and I can use it. That doesnt hold true for the average consumer. In their case, they need that card installed into a pc (along with the MB, proc, etc) in order for it to be 'suitable for use'. Therefore, Dell assembling a PC is considered manufacturing.

That is just my opinion, though.

-----
Main Entry: 2manufacture
Function: verb
Inflected Form(s): -tured; man·u·fac·tur·ing /-'fak-ch&-ri[ng], -'fak-shri[ng]/
transitive senses
1 : to make into a product suitable for use
2 a : to make from raw materials by hand or by machinery b : to produce according to an organized plan and with division of labor
3 : INVENT, FABRICATE
4 : to produce as if by manufacturing : CREATE <writers who manufacture stories for television>
intransitive senses : to engage in manufacture
- manufacturing noun
Posted by ProjectGSX (27 comments )
Link Flag
Which one is right?
"world's top three manufacturers"
Is word "manufactureres" right to use?Except IBM other are not doing anything else but "assemle computer hardware" just like me and many other small builders...Don't recall that Dell is manufacturing anything themself?Maybe mouspads or what.
Well more of these companies get out of building computers will leave more work for us,smaller guys....So I welcome change anyday.
Posted by (32 comments )
Reply Link Flag
Definition of manufacturing
Dell, for the most part, purchases computer components and assembles them at their manufacturing facility. I think that is pretty well described in #1 and #2 below.

The question would be: "What does 'suitable for use' refer to?" Give me a video card and I can use it. That doesnt hold true for the average consumer. In their case, they need that card installed into a pc (along with the MB, proc, etc) in order for it to be 'suitable for use'. Therefore, Dell assembling a PC is considered manufacturing.

That is just my opinion, though.

-----
Main Entry: 2manufacture
Function: verb
Inflected Form(s): -tured; man·u·fac·tur·ing /-'fak-ch&-ri[ng], -'fak-shri[ng]/
transitive senses
1 : to make into a product suitable for use
2 a : to make from raw materials by hand or by machinery b : to produce according to an organized plan and with division of labor
3 : INVENT, FABRICATE
4 : to produce as if by manufacturing : CREATE <writers who manufacture stories for television>
intransitive senses : to engage in manufacture
- manufacturing noun
Posted by ProjectGSX (27 comments )
Link Flag
PC's depreciate quite rapidly.
There will always be an ongoing market for PC's as they depreciate quite rapidly. Due to rapid advancement in technology and software developments. The average life span of a PC is estimated to be 2.5 years.

So can you imagine millions of people changing over their systems every two and a half years? This leaves alot of breathing space for PC vendors to make vast amounts of revenue in PC sales each year.

Consequently, the growing trend within the PC market today is gearing towards laptops. Laptops are dominating the market as people like the mobility of the product and in most cases they carry the same specifications as the desktops that are currently on the market.



Orane Franklin
Orane Productions Multimedia
[http://www.oraneproductions.com|http://www.oraneproductions.com]
Posted by Orane Productions (12 comments )
Reply Link Flag
PC's depreciate quite rapidly.
There will always be an ongoing market for PC's as they depreciate quite rapidly. Due to rapid advancement in technology and software developments. The average life span of a PC is estimated to be 2.5 years.

So can you imagine millions of people changing over their systems every two and a half years? This leaves alot of breathing space for PC vendors to make vast amounts of revenue in PC sales each year.

Consequently, the growing trend within the PC market today is gearing towards laptops. Laptops are dominating the market as people like the mobility of the product and in most cases they carry the same specifications as the desktops that are currently on the market.



Orane Franklin
Orane Productions Multimedia
[http://www.oraneproductions.com|http://www.oraneproductions.com]
Posted by Orane Productions (12 comments )
Reply Link Flag
This Couldn't Happen
Does everybody buy their computer at the exact same time? No,
that would be stupid. While some people may tend to buy their
computers at around the same time, you cannot generalize and
say that PC makers will go bankrupt just because everybody
bought their computer at the same time.
Posted by (3 comments )
Reply Link Flag
This Couldn't Happen
Does everybody buy their computer at the exact same time? No,
that would be stupid. While some people may tend to buy their
computers at around the same time, you cannot generalize and
say that PC makers will go bankrupt just because everybody
bought their computer at the same time.
Posted by (3 comments )
Reply Link Flag
 

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