Skip to main content

PC Growth Slowing

Gartner cites uncertainty over Microsoft's Vista.

Softening demand for desktop PCs and uncertainty surrounding


(MSFT) - Get Microsoft Corporation Report

next operating system should limit PC sales growth this year, a research firm says.

Worldwide PC shipments are expected to rise 10.7% from a year ago in 2006 to 234.5 million units, industry research firm Gartner says. That's down from last year's 15.5% shipment growth.

Although demand for mobile PCs is strong, desktop PC replacement purchases have peaked, Gartner says.

"The next two years will produce a turning point for the PC industry," George Shiffler, the director of research for Gartner's client platforms group, said in a statement.

The projections underscore a trend that has already manifested itself in the financial results of some of the PC industry's biggest players.

Last week,


(INTC) - Get Intel Corporation Report

said first-quarter sales

would miss targets by up to $500 million, as a result of increased competition from rival

Scroll to Continue

TheStreet Recommends

Advanced Micro Devices

(AMD) - Get Advanced Micro Devices, Inc. Report

and weaker-than-expected PC demand.



(DELL) - Get Dell Technologies Inc Class C Report

, the world's largest PC maker, told investors in February that

its sales growth this quarter will be in the single digits, compared to the 15% to 20% growth it has experienced in recent years. Dell's shares have treaded water since.

According to Gartner, desktop PC shipments in mature markets like the U.S. are expected to decline 8.6% in 2006, although they will rise 19.5% in emerging markets. Worldwide, desktop PC sales will grow a mere 1.9% in 2006, Gartner said.

Putting further pressure on PC growth is uncertainty about when Microsoft will release Vista, its next operating-system upgrade. Also unsure is the timing of innovations such as Intel's

new chip microarchitecture, unveiled this week.

"End-user concerns about availability and value of these new technologies could result in some buyers holding off PC purchases until later in 2006 or beyond," said Shiffler.

The one bright spot in the PC industry is the notebook business. Gartner predicts that worldwide mobile PC shipments will increase 31.4% in 2006, with strong growth in both mature markets and emerging markets.