PC Sales Hot For 2004, But Will Soon Cool Off

But leaner times loom, the research firm said.

Shipments of PC to commercial accounts -- as opposed to consumers -- increased by 17.2 percent in the second quarter of 2004 over the same period last year, said Loren Loverde, the director of IDC's quarterly PC Tracker, marking the fourth straight quarter where sales have climbed by double digits.

"Commercial buying was simply solid in the second quarter," said Loverde, "but down the road, several things are keeping us conservative on our projections."

Although 2004's first half was stellar enough to propel the year into a projected 14.2 boost over last year -- the newest estimate is, in fact, 0.7 percent higher than the one IDC made in June -- sales will slow in the second half, barely break the double-digit growth rate in 2005, and increase by even smaller margins in the years after that. Projections for 2005 have been revised downward, said Loverde, to 10.5 percent, and the span between 2006 and 2008 will see a return to single-digit growth in PC shipments, most likely in the 8 percent range each of those years.

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Pent-up demand for replacement systems, said Loverde, has been driving the bigger sales numbers during the second half of 2003 and the first half of this year. But that demand is nearly satisfied in some markets, such as the United States, and coming close in others.

"This is a saturated market," said Loverde, "and the recovery is maturing. As it matures, and the recovery results in more shipments, it creates a larger overall market. That makes it more difficult to sustain high growth, just on a numbers basis."

Slowing sales of consumer systems is another reason why future numbers look a bit gloomier, he said. While the global economic recovery during the second half of 2003 drove consumer PC sales up 13.8 percent worldwide and 17.3 percent in the United States, glitches in that recovery have lowered growth in 2004 to 11.8 worldwide and a dismal-by-comparison, single-digit 7.8 percent in the United States.

That trend -- U.S. shipments softening during the second quarter -- was made up, at least for the short term, by other areas taking up the slack.

"That the U.S. was weaker than we original expected was a bit of a surprise," said Loverde. But Europe's shipments will continue to grow, he added, in large part because of the strength of the Euro.

But even a continued boom in sales of portable PCs won't be able to sustain the high growth rates in the coming years, said Loverde. Laptops, which accounted for 25 percent of t global system shipments in 2003, are expected to slowly climb to 36.6 percent of the total by 2008 as more people go portable.

"People are looking at mobility to encourage systems refreshes," said Loverde, "but we're still talking about experienced users for the most part, not new users, and the same replacement cautions apply." Overall PC growth in Europe and the Asia/Pacific region will slow in part, he said, because of cooling portable sales.

*This story courtesy of TechWeb.com.