Slower PC sales won't hit Israel - yet

Other reasons given for a lag in desktop PC sales is the rise of laptop sales, which are becoming more standard in enterprise environments.

March 21, 2006 06:54
1 minute read.

Maturity in the market will lead to a slowdown in worldwide sales growth of new personal desktop computers in 2006, a report published by international business research firm Gartner Inc. said Monday. Yet, while a similar decline in sales growth inevitably will hit the Israeli market, as well, president of Gartner's Middle East operations Baruch Gindin said that likely wouldn't happen for another nine to 12 months. Worldwide PC shipments are projected to total 234.5 million units in 2006. Although that is a 10.7 percent increase from 2005, it is slower growth than the 15.5% growth seen in 2005. "Much of the growth in the past two years came as a sort of compensation after the recession years," Gindin explained. "Before the recession started, people were buying new PCS every two years or so, but once things got tighter, they started waiting three to four years. That made production spike up artificially in 2004 and 2005, and the 2006 projection reflects a correction to more realistic spending levels." The correction factor will cause sales to mature markets to decline 8.6% in 2006, while shipments to emerging markets, whose cycles were not changed by the recession, are forecast to increase 19.5% for the year, according to Gartner. In Israel, the recession ended about a year later than it did elsewhere, Gindin said, so slowing sales may not become a factor until the end of 2006. "Given that and the high growth rate over the past two years, it should take about nine months to a year for the market to catch up," Gindin said. "But it will come - Israel always follows the world markets." Other reasons given for a lag in desktop PC sales is the rise of laptop sales, which are becoming more standard in enterprise environments. Worldwide mobile PC shipments are forecast to grow 31.4% in 2006, the report said. A final reason given for slower sales is uncertainty about new products awaiting roll-out such as a precise release date for Microsoft's new Vista operating system and new technical innovations from Intel. "End-user concerns about the availability and value of these new technologies could result in some buyers holding off PC purchases until later in 2006 or beyond," the report said. Gindin, meanwhile, was not concerned about Israeli technology makers being hurt by the slowdown. "Some semiconductor makers might see a small correction for overproduction in recent quarters, but nothing substantial," he said.

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