PC sales expected to slow in 2006

Growth in 2006 worldwide PC market will drop from the 15.8 percent rate seen in 2005, according to new data.
Written by Dinesh C. Sharma, Contributor

Global personal computer sales are projected to grow at 10.5 percent in 2006, compared with 15.8 percent growth seen in 2005, according to new data from analyst IDC.

Fewer replacements and slower economic growth will slow down computer sales in the coming months, but the lure of low-cost and portable machines will keep the growth rate at double digits in 2006, the market researcher said in its forecast on Tuesday.

The overall growth rate for 2006 might have been even lower but for a revised forecast of 15 percent growth in the fourth quarter of 2005, IDC said. The earlier projection for the quarter was 12.6 percent, and 9.1 percent for 2006. The strength of the overall market, particularly in portable PC adoption, has boosted prospects in all markets except Japan.

"Following the shocks of 2001 and 2002 many people were impressed with the strength of the market in 2004 but cautious about the foundation and longevity of this growth," Loren Loverde, director of PC research at IDC, said in a statement. "The fact that solid double-digit growth has continued through 2005 shows that the market recovery did not peak in 2004 as many expected but is still ongoing."

The new projections make 2006 the fourth consecutive year likely to have double-digit shipment growth, and raise the compound annual growth rate for 2005 through 2009 to 9.4 percent, IDC said. The number of shipments is projected to touch 300 million units in 2009, while the value of shipments will be US$250 billion.

In U.S. markets, demand for portables and business computers will help fuel the growth, despite the impact of recent hurricanes and rising oil prices. The number of units shipped in 2005 will be 64.2 million and is projected to grow to 69.5 million in 2006, said IDC.

A softening economic environment and a likely drop in PC replacements will slow down growth in Western Europe. In Japan, third-quarter growth was strong in 2005, but factors such as rising oil prices and pressure on business spending will influence the outlook in 2006. Markets in the Asia-Pacific region will remain static due to factors such as the threat of a bird flu epidemic and the slowing Chinese economy, IDC said.

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