Year in Review: PCs/SERVERS

The PC defied death again.

Some futurists have repeatedly predicted the fading of the personal computer, but thanks to lower prices and emerging nations such as India, PC sales rose beyond expectations in 2005.

And shipments of PCs will likely increase by 17.1 percent by the end of the year, topping 200 million units. Both Gartner and IDC had to revise their forecasts numerous times this year as consumers bought desktops and laptops more rapidly than expected.

Prices played a big role. When Wal-Mart sold $398 Hewlett-Packard laptops in November, customers pushed and shoved to get into stores. And desktops plunged to below $300.

Still, 2005 revenue is expected to increase from last year's levels, according to IDC, so not all the sales growth is being eaten by the huge discounts.

The pecking order among the large companies began to shift during the year as well. Dell, an inexorable force for many years, showed signs of weakness. In the third quarter, for the first time in seven years, the company grew only as much as the rest of the industry. And Dell's customers continued to complain about support and service.

Hewlett-Packard, meanwhile, began to return to fighting form under new CEO Mark Hurd. And Acer continued to be the fastest-growing manufacturer.

Big surprises also came from the rest of the pack. Despite its merger with IBM, Lenovo didn't lose much market share. And Apple Computer announced it would convert to Intel chips and kept its place as the style maven of the industry.

Meanwhile, what did consumers groove on? Notebook computers. Although lightweight notebooks remained popular, those big-screen jobs continued to excite a lot of buyers. For desktops, dominant themes were dual-core chips and 64-bit processing, but those technologies won't gain critical mass until 2006.

Manufacturers also moved closer to bringing cheap computers to the developing world. Some of these machines will run on car batteries. Literally.

As for servers, 2005 was sort of a replay of 2004. The Opteron chip from Advanced Micro Devices, along with 64-bit Intel's Xeon chips, gained ground while Itanium continued to wane. IBM increased its dominance in supercomputers while Sun trumpeted some accomplishments but did not reignite a comeback.

But servers consume a lot of electricity and energy prices have continued to rise. So while Blade servers haven't taken over the world yet, blades and other energy-efficient technologies should enjoy a brighter spotlight in 2006.

--Michael Kanellos

2005 Highlights

New HP head was NCR's turnaround artist

Hewlett-Packard got a new CEO this year, and few people in the industry knew anything about him. But so far it's working out.

Apple to ditch IBM, switch to Intel chips

That was fun, wasn't it? The "Why PowerPC chips are superior" debates that raged for years suddenly ended one morning.

The $100 computer is key to India's tech fortunes

What does a $100 computer look like? A thin client terminal, sometimes hooked up to solar panels or car batteries.

Has the notebook-to-handheld conversion begun?

Notebook sales remain brisk, but some execs are using BlackBerrys when they travel. This could be a problem for PC makers.

IBM brains capture a PC soul

The SoulPad. No, it's not a nightclub from the '70s. It's IBM that lets you take your desktop anywhere on a USB key.

Otellini outlines chip architecture

By 2006, most desktops will come with dual-core chips. One will run virus scans and VPNs, the other runs upfront applications.

Dell wraps itself in luxury

Taking a cue from companies like AlienWare, Dell emphasizes high-end desktops. It remains unclear how well this will work.

PC shipments leap past expectations

It was the same headline every quarter, but despite high oil prices and PC saturation, some people still scooped them up.

IBM blade server redesign in 2006

Blades came out right in time for the 2001 meltdown. Then companies tweaked designs and technology and interest climbed.

Ready for a 20-inch laptop?

Forget fertility issues, consumers like big screen laptops, and they are going to continue to get wider, according to IDC.

ThinkPad returns to retail

Lenovo could have had a tough time with the IBM merger, but it's gone better than expected. One step: bring back ThinkPad.

When good capacitors go bad

A downside of low prices can be skittish components. Consumers found out the hard way that some PCs get bad capacitors.

Itanium sinks again in supercomputers

Itanium has been on the market for nearly six years, and sales still haven't taken off, even in rarefied markets where it excels.

Behind the headlines

• Gates taking a seat in your den
• Sun aims to sell computing like books
• Norad gives thumbs up to blade PCs
• New Life for Moore's Law
• Orion Multisystems ships 96-processor workstation
• IBM sells Blue Gene for brain research
• HP trots out the $249 desktop
• AMD's server share leaps past 10 percent mark
• Will Wal-Mart sell $398 notebooks
• Sun to sell Niagara servers this year
• Dell's dilemma-it's about pricing
• U.S. pads lead in global supercomputing

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