Death of the PC greatly exaggerated

Written by Neil Strother, Contributor
Don't believe reports about the PC's death.
They aren't true.

However, the PC's role is changing. Over the next five years, PCs will invade kitchens, living rooms and waiting areas, according to a new report from the experts at Cahners In-Stat Group. Click for more.

Consumers will use these new-fangled PCs as entertainment centers for music, movies, TV access and video games, In-Stat says.

Businesses will buy more notebooks to increase worker mobility and acquire revved-up desktops to take advantage of application service provider (ASP) services.

These trends will drive continued vigorous PC sales worldwide. But, In-Stat sees a slight slowing in coming years, from this year's 15.8% growth to 13.5% year-over-year in 2005. The projected decline is due to faster CPUs and hard drives that reduce the need for continually upgrading equipment.

Several other trends will shape the PC market, says In-Stat:
  • Flat screens and other advances will shrink the size of desktops, making it easier for consumers to place them in living rooms and kitchens.
  • "Free" PCs, low-end (but still fast) CPUs and dramatic cuts in hard-drive prices will bring computers to people who couldn't afford one.
  • Notebook shipments -- rising from 20 million units last year to 69 million in 2005 -- will outpace the growth rate of desktops.
  • Customers will get more for their money as components improve while prices drop.
  • The more stable and standards-filled Windows 2000 will induce users to upgrade to new models.
  • Increased broadband offerings will drive rapid adoption of new apps, such as the MP3 format and multiplayer gaming, boosting new PC sales.

The future's not totally bright though. Profit margins are on the decline as more competitors enter the field, In-Stat says.

Nonetheless, In-Stat believes PC makers that partner with entertainment companies and fast-access providers to roll out new services will be well positioned to flourish.

Agree about the PC's future? Disagree? Hit Talkback below and let me know.
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