PC shipments are expected to remain strong through the rest of 2005, but price decreases are expected to negate much of the shipment growth, according to research firm Gartner.
Global computers shipments are expected to rise 12.7% in 2005, but global PC revenue is seen up by only 0.5%, said Gartner. The firm also boosted its shipment growth forecast for mobile PCs -- to 31% from an earlier target of 26.5% -- but price pressures are increasing here, too.
"The quest for growth is forcing vendors to test the limits of PC price elasticity," said principal analyst George Shiffler, according to a statement.
The outlook is similar for 2006, with Gartner predicting 10.5% shipment growth and a 0.4% decline in PC revenue.
Price declines for computers will eventually slow, especially if component costs firm, but competitive pressures will keep the trend in tact, Shiffler predicted.
Gartner's findings echoed second-quarter results for the major computer manufacturers.
missed second-quarter sales targets as consumers failed to buy as many products as expected after Dell dropped prices. The company also cited tight supplies which won't yield the usual cost decreases in the current quarter.
said notebooks booked the largest price declines of its PC division during the fiscal third quarter. The division was a
bright spot during the quarter for H-P, but competition is heating up as more consumers buy mobile PCs.
said stiff competition would weigh on its margins and hold back its financial results for the remainder of the year.