February 15, 2005 11:28 AM PST

PC shipment growth may slow in 2005

Sluggish prospects in the desktop PC market may drive down global shipments to single-digit growth in 2005, according to a new Gartner study.

The market research firm's preliminary projections indicate that shipments this year will be around 199 million units, only a 9 percent rise from the 183 million PCs sold in 2004. The segment had grown by 11.6 percent in 2004, compared with the previous year.

The deceleration can be traced to the petering out of replacement cycles for both corporate and home PCs, Gartner said.

"We believe professional replacement activity peaked in 2004 and will decelerate sharply over 2005," Gartner analyst George Shiffler said in a statement. "While home replacement activity will continue to provide some strength to the market in 2005, it too seems likely to slow by year-end."

On the other hand, laptops will be in greater demand this year, and that segment's growth is projected to top 17.4 percent in 2005. "Mobile PCs are becoming increasingly attractive to a broad range of users. There are a number of reasons for this, including rapidly falling system prices, enhanced wireless experiences and expanded multimedia/entertainment functionality," Shiffler said.

Gartner also isn't sure whether vendors' attempt to push the PC into the living room will meet with much success this year. Since Microsoft released its Windows XP Media Center Edition, PC vendors such as Dell and Gateway have been debuting PCs that are promoted as digital media hubs.

Despite this push, the price and complexity of entertainment-focused computers is hindering their adoption, Gartner suggested.

"Media PCs remain relatively expensive and suffer from spotty reliability, as well as troublesome ease-of-use," Kiyomi Yamada, an analyst for Gartner's Client Platforms research, said. "PCs are also handicapped by low interoperability with other media devices and poor aesthetics. This is hurting their ability to compete against alternative devices that are both cheaper and more readily connected to media sources."

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History Repeats Itself
It's interesting to read that one of the factors limiting adoption of Media Center PCs is "poor aesthetics." How history repeats itself. One of the major factors contributing to Edison Grammaphone being supplanted by the Victor Talking Machine Company (later RCA Victor) was Edison's insistence on sticking to external speaker horns long after Victor introduced Victrolas with horns inverted into attractive pieces of furniture. Although the external horns were acoustically superior, they didn't fit well into the parlors of the era, which helped lead to Victor's, well, victory.
Posted by jshale (37 comments )
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History Repeats Itself
It's interesting to read that one of the factors limiting adoption of Media Center PCs is "poor aesthetics." How history repeats itself. One of the major factors contributing to Edison Grammaphone being supplanted by the Victor Talking Machine Company (later RCA Victor) was Edison's insistence on sticking to external speaker horns long after Victor introduced Victrolas with horns inverted into attractive pieces of furniture. Although the external horns were acoustically superior, they didn't fit well into the parlors of the era, which helped lead to Victor's, well, victory.
Posted by jshale (37 comments )
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