PC Outlook Is Still Strong, According To : Portable Adoption And Growth In Emerging Markets Remain Key Drivers

global Central and Eastern Europe, the Middle East and Africa, and Latin America Asia/Pacific Western Europe

IDC: Following another strong quarter in Q1 2005, has slightly increased expectations for the PC market in 2005 and 2006. Total PC shipments are now expected to reach 199.2 million in 2005 on growth of 11.4%, followed by shipments of 217.0 million and growth of 9% in 2006. Emerging markets in Central and Eastern Europe, the Middle East and Africa, and Latin America continue to grow by more than 20% per year while Asia/Pacific and Western Europe continue to grow in the mid- to low teens. Portable adoption and low prices remain key drivers, sustaining business replacements and boosting consumer and small business demand. Persistent double-digit growth and a fairly gradual slowdown have raised our short-term outlook. "For several quarters now the market has responded to aggressive pricing and marketing, creating opportunities for growth and maintaining market momentum. Overall growth is likely to fall to single digits, but we continue to expect steady gains throughout the forecast period in all regions."

Although U.S. growth trails that of most other regions, in 2005 the United States will add nearly 5 million units to the total it absorbed in 2004. In much of the developed world, the law of large numbers really applies. Small growth rates still translate into large incremental unit shipments.

• United States – Despite a soft first quarter for the consumer segment, consumer demand is expected to remain fairly solid, even as business growth slows toward the end of the year. Portable PC demand will continue to be the primary market driver throughout the forecast period while desktop growth will slip from mid-single digits to near zero.Western Europe – Strong consumer demand gave the market a boost in the first quarter and is expected to bolster the market through the fourth quarter. Aggressive pricing and adoption of broadband and digital entertainment are boosting the market.

• Nevertheless, overall growth should diminish later in the year as replacement demand wanes.

• Japan – Consumer demand is also likely to boost growth in Japan. However, slowing commercial growth and a fickle consumer segment are expected to limit overall growth to mid-single digits.

• Asia/Pacific – Robust demand and a booming economy in China continue to drive growth in Asia/Pacific. Despite risks from bird flu and natural disasters, strong growth in the portable, consumer, and small business segments is expected to keep growth in double digits throughout the forecast period.

U.S. and Worldwide PC Shipments and Growth, 2002-2006 Publ 20050616