Gartner, IDC: Good PC Sales Seen For 2004

NEW YORK— The general consensus among PC vendors and analysts is 2004 will follow in 2003's footsteps and the category will see strong double-digit growth. But what will spur consumers to buy a new PC or notebook this year is still a matter of conjecture.

Sales reports for 2003 from International Data Corp., of Framingham, Mass. and Gartner, of Stamford, Conn., gave the industry a strong double-digit growth rate, with Dell placing first, and Hewlett-Packard second, in total units shipped.

Industry insiders believe consumers are ready for new technologies, like 64-bitprocessors or rewritable DVD drives, while others say that more people simply need to replace their aging computers. Vendors were particularly excited because for the first time in almost five years consumers are being given a PC-centric reason to replace their old system. This is a major break from the two-year-old trend that saw computer owners improving their PCs by adding items like LCD monitors, more memory and extra hard-drive capacity.

Mike Flanary, Gateway's desktops VP, predicted Windows Media Center PCs would be a draw. "As the PC becomes more integrated with entertainment products this will drive growth," Flanary said. "Consumers have been waiting. We've run through a time period when there wasn't a reason to switch PCs, but now with broadband and digital media there is a compelling reason to upgrade."

Gary Elasser, eMachines' technology and platform development VP sees the coming year as a flashback to the heyday of PC sales in the late 1990s when consumers were continually fed a stream of new capabilities that gave them a reason to upgrade. The first few 64-bit titles will come from the gaming sector with a new installment in the Doom series expected out this year, he said.

Steve Baker, NPD's IT research director disagreed saying a computer's specifications have not, and will not, drive sales. What convinces consumers to make the investment is whether the device enables them to accomplish certain tasks.

"Activities like digital imaging and home networking will be important," Baker said, "and people who are interested in getting an LCD monitor might go and pick up an entirely new system."

For 2004, Baker expects healthy sales for desktops and notebooks, with most of the growth taking place on the back of notebook computers. The second half of the year could see year-over-year sales figures falter slightly because the industry performed so well in late 2003, and it will be difficult for the industry to greatly exceed those numbers.

IDC's forecast has the industry posting high double-digit growth due to continued strong consumer demand, but commercial spending will remain somewhat weaker for the year.