PC sales growth to moderates in 2005

Mobile computer shipments continue to soar

After achieving a double-digit percentage increase in 2004, PC unit shipments are set to rise at a more moderate pace in 2005 as market growth becomes increasingly driven by replacement sales.

Worldwide PC shipments grew to 191 million units in 2004, up 13 percent from 169 million in 2003, according to iSuppli Corp. Last year represented the peak period for PC sales growth during the present cycle.

In 2004, PC sales growth is returning closer to the average rate seen during the past five years. PC unit shipments will rise to 206 million units in 2005, up 8 percent from 2004. Unit growth will remain in the single-digit range in 2006, before picking up again in 2007, iSuppli predicts.

The PC industry has become mature, and has become saturated in many regions. Therefore, shipments are driven primarily by replacements rather than by new users.

Notebook PC unit shipments are growing twice as quickly as those of desktop PCs. Unit shipments of notebook PCs are expected to grow an average of 15 percent over the forecast period, while desktop PC units will grow by 9 percent. The combined unit Compound Annual Growth Rate (CAGR) for the PC market will be approximately 10 percent from 2003 to 2008, iSuppli predicts.

Mobile PC shipments are receiving a boost from declining prices for LCD panels. The declining costs of the displays are translating into reduced pricing for mobile PCs, making them more attractive to users and boosting sales. iSuppli already has upwardly adjusted its estimate and forecast of notebook PC sales to accommodate the impact of the reduced pricing and may do so again.

Despite this, iSuppli does not endorse the scenario offered by some observers that the bulk of the PC market will convert to mobile platforms.

Joe D’Elia is the senior director and principal analyst, compute platforms for iSuppli Corp. He can be reached at jdelia@isuppli.com