IDC lowers PC sales forecast

Longer business PC replacement cycles spell doom for PC market.

Analyst firm IDC has lowered its PC sales forcast for 2006, after sales data indicates that enterprises are slowing down their PC refresh cycles.

"The third quarter reflected slower growth in desktops that will continue to constrain the market," said Bob O'Donnell, vice president, Clients and Displays at IDC. "However, more replacements beginning in late 2007 and increasing specialization in designs will support higher growth down the road."

Despite PC shipments increasing by 9.1 percent in the third quarter of 2006, computer sales in the US and Europe remain sluggish, the firm found.

PC shipments in the third quarter of 2006 in the US stayed flat year-over-year. Consumers are delaying the purchase of new PCs as they await the arrival of Windows Vista. But enterprises typically don't delay system purchases in anticipation of new operating systems. IDC instead suggested that businesses are starting to lengthen their PC replacement cycles and lowered its sale projections for 2007.

The analyst firm however remains optimistic about the long term growth potential for the PC market. In addition to Vista, new technologies, increased adoption of portable computers and new form factors will cause PC shipment growth to remain near 8 percent, the firm predicted.

Growth in other mature markets remains troublesome as well. As Europe and Japan recovered from growth leveling off in the second quarter, PC manufacturers are increasingly dependent on emerging markets to maintain their historic growth rates.