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HARDWARE
1 PC Pricing, Margins Stabilize.
Vista is under attack for security holes and tardiness to market, but it will provide much-needed relief to PC makers and system builders that have been squeezed since pre-Y2K. The new OS from Microsoft demands higher-performing processors and a lot more memory -- meaning solution providers can either see sturdier hardware margins or, if customers don't upgrade to Vista right away, the opportunity to sell other efficiency-boosting solutions to keep those customers competitive.
2 Wide Eyes For Wide-Screens.
The market will continue to say goodbye to square-screen LCD displays, and hello to wide-screens (all the better for efficiency and, say, watching movies.) Solution providers will find that even customers who don't upgrade PCs will be inclined to upgrade monitors -- once they're convinced employees will be able to get more work done if they can open up more programs at once.
3 A Big Stink Over Ink.
Printer, copier and MFP manufacturers have long looked at the sale of consumables (i.e. ink cartridges) as a license to print money. But as hardware margins have eroded over the last few years, a growing number of solution providers have gone to third-party cartridge makers in an effort to stay competitive and still make money. 2007 will be the year vendors like HP, Xerox, Lexmark and others must finally deal aggressively with price competition from blank-label ink suppliers -- and in the process give new incentives to the channel to stick with branded ink.
4 Trouble In Round Rock.
It's not enough that Dell lost a lot of market share during 2006, or that its margins and profit declined, or that it had to recall 4.1 million notebook batteries due to explosion hazards -- the company ended 2006 under investigation, under scrutiny and under pressure. As the market adapts to a Dell in significant decline, solution providers will be able to do what they've always done best: show the customer they are better served in the long haul by a trusted local IT advisor than a direct PC vendor.
NEXT: Predictions in managed services, networking, security, storage and software
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