Gatner: PC Sales Could Be Slow This Holiday

Gartner says slowing home market clouds outlook for strong PC holiday season; analysts worry digital entertainment devices will overshadow home PCs.

Worldwide PC shipments are projected to total 51.9 million units in the fourth quarter of 2004, a 10.1 percent increase from the same period last year, according to a preliminary forecast by Gartner,Inc. While PC shipments will experience double-digit growth in the fourth quarter due to healthy shipments in the professional market, home sales this holiday season will be weaker than expectedbecause of increased competition from digital entertainment products.

“Aside from mobility, there is conspicuous lack of ‘must have’ new features for home PC users, and this is noticeably impacting home sales, especially replacements purchases,” said George Shiffler, principal analyst for Gartner’s Client Platforms research.

“This lack of ‘must have’ features makes the expanding selection of entertainment electronics, such as flat panel TVs, look even more attractive to consumers,” said Kiyomi Yamada, analyst for Gartner’s Client Platforms research. “Many leading PC vendors are showcasing digital entertainment products this holiday season, and many consumers will choose to spend their holiday budgets on these products rather than PCs.”

A slower home market is having an impact on year-end projections. Worldwide PC shipments are now forecast to reach 182.7 million units in 2004, an 11.4 percent increase over 2003. This is down from Gartner’s previous forecast of 13 percent growth for this year. Gartner analysts said the home market’s disappointing performance in third quarter accounts for about half of the difference in the revised forecast, while the prospect of weaker home sales this holiday season accounts for the remainder.

Additional information is available in the Gartner Alert “4Q04 Update: Global PC Forecast Scenarios, 2004-2005.” The Alert provides preliminary projections for the worldwide PC industry, both on a revenue and shipment basis. This document is available on Gartner’s Web site at http://www3.gartner.com/DisplayDocument?ref=g_search&id=460614.