Language Selection

English French German Italian Portuguese Spanish

Merrill sees slowing PC growth ahead

Filed under
Hardware

Merrill analyst Steve Milunovich estimates that PC unit shipments will expand by about 11% in 2005, up from previous estimates of 9%, and increase 7.5% in 2006.

Milunovich estimates that worldwide shipments should reach 210.4 million in 2005 and edge up to 227 million next year.

"The days of double-digit PC unit growth is over," Milunovich said in a research note.

Merrill's forecasting model "indicates that PC-unit growth peaked in 2004 and should slow through 2006," he said, adding that "we expect replacement PCs will be the only driver of growth."

PC shipments, while rising, have been affected by mixed data from several fronts, Milunovich said.

Total worldwide shipments are expected to reach 51.2 million in the third quarter of 2005, up from 49.4 million in the second quarter. Milunovich said that prices have been driven down by lower component costs, helping spur recent increases in shipments.

However, he noted that component prices are showing signs of tightening up, pointing to DRAM memory vendors and hard-disk drive companies as well as to efforts by Advanced Micro Devices to take market share from Intel Corp. as it comes out with a new, lower-power chip for mobile computing.

Milunovich added that movements in currency exchange rates could become a major factor in the PC industry due to recent strength in the dollar. Such strength could translate into slower sales outside the U.S., leading to particular weakness in Europe.

On the positive side, Milunovich said that dwindling competition has been a benefit to the PC companies' operating profits.

While the industry's average operating margins have declined from the high single digits seen in the 1990s, Milunovich said the average company has an operating margin of about 7% now.

He added that Apple Computer Inc. has one of the highest operating margins, at 12%, while Dell Inc. remains at 9%.

By Rex Crum
MarketWatch.

More in Tux Machines

Leftovers: Gaming

Leftovers: Screenshots

Quad-core media player runs Kodi/XBMC on OpenElec Linux

SolidRun’s tiny, $100 “CuBoxTV” media player runs OpenElec Linux and Kodi (formerly XBMC) on a quad-core i.MX6 SoC, and offers 100Mbps+ video decoding. The CuBoxTV is the first Freescale i.MX6 based media player to run the Kodi (formerly XBMC) multimedia distribution, says Israel-based SolidRun. CuBoxTV is closely based on the company’s latest i.MX6 based CuBox mini-PC, which now sells for $80 to $140, depending on the number of Cortex-A9 i.MX6 cores and other features. The CuBoxTV, which is available only with the quad-core i.MX6 SoC, goes for a sale price of $100. Read more

Canonical Is Still Considering Turning the Phone into a Mini-PC

Canonical is working to complete their idea of convergence with the launch of Ubuntu Touch, a new operating system for mobile devices. The desktop flavor of Ubuntu will eventually share the same code with the mobile one, and their plans go even further than that. Read more