Gartner: PC revenue to decline in 2006

PC vendors are on pace to watch industry revenue decline 2.5 percent to $198.5 billion in 2006 despite strong sales growth, Gartner said.

Even as PC sales continue double-digit growth, industry revenue is likely to decline 2.5 per cent to $US198.5 billion in 2006, according to a forecast released by Gartner. Worldwide PC shipments are scheduled to rise 10.5 per cent over last year, reaching 233.7 million units.

The disparity comes because PC vendors have been slashing the prices of desktops and notebooks as they hustle to compete with each other. Another force pushing computer prices down is a series of recent price cuts by Intel and AMD. Processors are the most expensive part of a PC.

Now, as the holiday sales season approaches, things could get even worse for vendors such as Dell and HP. In additional to wrestling with each other, they would also have to compete with consumer electronics companies, Gartner research director, George Shiffler, said.

Shoppers have a limited number of dollars to spend on electronics. That spelt trouble for PC vendors since the price of a low-end desktop was comparable to a smartphone and its accompanying service contract, he said.

Flat panel TVs will also compete with PCs, since excess production capacity has lowered LCD prices and producers are expected to cut prices further with aggressive holiday discounts. Even Microsoft's impending launch of the new Vista OS would produce only a temporary rise in sales, Shiffler said.

The Gartner study echoes weak financial results at Dell, the world's largest PC vendor. Dell blamed cost cutting and weak demand for $US14.1 billion in revenue for the quarter ended August 4. That number was up only 5 per cent over the same period last year although Dell sold 11.6 per cent more computers worldwide, climbing from 8.7 million in the second quarter of 2005 to 9.7 million this year.

Looking past 2006, the flood of low-cost PCs would drive brisk sales in emerging markets through 2008, but mature markets like the US would soon slump to single-digit growth, Gartner said.

Join the newsletter!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Ben Ames

IDG News Service
Show Comments



Victorinox Werks Professional Executive 17 Laptop Case

Learn more >



Back To Business Guide

Click for more ›

Most Popular Reviews

Latest Articles


PCW Evaluation Team

Louise Coady

Brother MFC-L9570CDW Multifunction Printer

The printer was convenient, produced clear and vibrant images and was very easy to use

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Walid Mikhael

Brother QL-820NWB Professional Label Printer

It’s easy to set up, it’s compact and quiet when printing and to top if off, the print quality is excellent. This is hands down the best printer I’ve used for printing labels.

Ben Ramsden

Sharp PN-40TC1 Huddle Board

Brainstorming, innovation, problem solving, and negotiation have all become much more productive and valuable if people can easily collaborate in real time with minimal friction.

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Ratchada Dunn

Sharp PN-40TC1 Huddle Board

The Huddle Board’s built in program; Sharp Touch Viewing software allows us to easily manipulate and edit our documents (jpegs and PDFs) all at the same time on the dashboard.

Featured Content

Product Launch Showcase

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?