Ten p.c. increase likely in PC shipments

BANGALORE: Worldwide PC shipments are forecast to total 255.7 million units in 2007, a 10.5 per cent increase from 2006, while India shipments are set to grow by 20 per cent.

Worldwide PC revenue is projected to reach $213.7 billion, a 4.6 percent increase, according to the latest forecast by Gartner, Inc.

“We expect the market environment to be much the same over the near term as it has been recently,” said George Shiffler, research director for Gartner Dataquest’s Client Platforms Markets Group.

“Emerging markets and mobile PCs will continue to afford PC vendors their best opportunities for growth. However, falling average selling prices (ASPs), slowing replacement activity, and further declines in mature market desk-based PC shipments will keep PC vendors under pressure to rationalize their operations or exit the market,” he said.

Commenting on the India market, Diptarup Chakraborti, principal analyst at Gartner India, said, “The consumer and the SMB segments will be the major drivers of the Indian market. High demand for mobile PCs bolstered the growth, overtaking sales in the desk-based segment. In addition, with a greater focus given to e-governance, the government spend is expected to propel the market further North.”

Gartner analysts said worldwide PC shipments will enjoy at best a limited boost from the release of Microsoft’s new operating system (OS), Vista.

“Vista’s effect on PC shipments ultimately depends on the number of consumers and small and midsize businesses (SMBs) that find its new features compelling enough to buy a new PC,” said Mikako Kitagawa, principal analyst for Gartner Dataquest’s Client Computing Markets Group. “While Vista includes a number of interesting features, these features just don’t have enough ‘must have’ appeal with the average home and SMB user to spark a significant rush of new PC sales.”

Gartner analysts said they expect a minor increase in sales to the small number of consumers and SMBs that put off replacing their older systems in anticipation of Vista’s release. However, the vast majority of consumers and SMBs are expected to adopt the new OS as they gradually replace existing machines during the next several years.

Gartner analysts also said that, while Vista’s impact on PC sales will be relatively limited, Vista uptake by consumers and SMBS that do buy new PCs will be strong.

“Consumers and SMBs in mature markets would be hard-pressed to find a new PC with Windows XP,” said Annette Jump, research director for Gartner Dataquest’s Client Computing Markets Group. “This will naturally speed Vista’s adoption among consumers and SMBs. If you consider that Window Vista Home Premium is priced higher than Windows XP Home, Microsoft could enjoy very good results from Vista if large numbers of consumers opt for the premium edition. PC vendors could also benefit if they are able pass this cost increase onto consumers in the form of higher PC prices. ”

Vista is forecast to have virtually no impact on PC shipments to larger businesses in 2007. And Vista adoption among large business is expected lag behind consumers and SMBs.

With large businesses, the issue is not so much a lack of must-have features as it is the insistence of large enterprise IT managers that the new OS be thoroughly tested and validated against established applications before it is widely deployed. Gartner analysts expect large businesses to delay widespread adoption of Vista until at least of middle of next year — about the time they are expected to begin a new replacement cycle.

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