The PC chugs on
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.
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.
That was fun, wasn't it? The "Why PowerPC chips are superior" debates that raged for years suddenly ended one morning.
What does a $100 computer look like? A thin client terminal, sometimes hooked up to solar panels or car batteries.
Notebook sales remain brisk, but some execs are using BlackBerrys when they travel. This could be a problem for PC makers.
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.
By 2006, most desktops will come with dual-core chips. One will run virus scans and VPNs, the other runs upfront applications.
Taking a cue from companies like AlienWare, Dell emphasizes high-end desktops. It remains unclear how well this will work.
It was the same headline every quarter, but despite high oil prices and PC saturation, some people still scooped them up.
Blades came out right in time for the 2001 meltdown. Then companies tweaked designs and technology and interest climbed.
Forget fertility issues, consumers like big screen laptops, and they are going to continue to get wider, according to IDC.
Lenovo could have had a tough time with the IBM merger, but it's gone better than expected. One step: bring back ThinkPad.
A downside of low prices can be skittish components. Consumers found out the hard way that some PCs get bad capacitors.
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