PC Sales Under Pressure

At the same time, a broad array of electronic gadgets competing for consumer dollars means that PC makers have little choice but to keep prices low.

This holiday season could prove especially challenging for PC makers as an oversupply of LCD panels has made flat-panel TVs more affordable than ever.

"The battle between PCs and LCD TVs in particular is likely to be especially intense over the holiday season given that LCDs TVs will almost certainly be backed by aggressive holiday marketing and even lower prices," said Shiffler.

And the absence of Vista, which Microsoft has delayed until 2007, will definitely make it harder for PC vendors to maintain consumer interest in PCs' without cutting prices, Shiffler said.

Even Vista's release in 2007 could stimulate some added growth, but Gartner is skeptical of the new operating system's impact.

Emerging markets will continue to have double-digit growth over the coming years, but the overall impact on the PC industry will muted, given that mature markets like the U.S. and Western Europe still account for the lion's share of sales.

The challenges facing the PC business mean it is not going to be a big money-maker looking forward, said Shiffler. "We're talking flat revenue growth -- maybe mildly positive -- as far as we can see, which is around 2010."

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