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Gartner Predicts PC Market Consolidation

Analysts at Gartner expect tough times ahead for the PC industry.

In a report released this week, the IT analysis firm forecasts that three of the top 10 global PC manufacturers will be exiting the market by 2007 as PC shipment growth slows and profit margins contract.

"With PC replacements still in full swing, 2005 should be a reasonably strong year for PC vendors," said Leslie Fiering, research vice president for Gartner's Client Platforms group. "However, the end of the replacement cycle is likely to strain viability for even the largest PC vendors in 2006 and beyond."

Of the top 10, only Dell is consistently profitable. Gartner singled out the PC divisions of HP and IBM as vulnerable to being spun off if they drag too heavily on margins and profitability. The other seven companies rounding out the 10 largest PC manufacturers are Fujitsu/Fujitsu Siemens, Toshiba, Acer, NEC, Legend, Gateway and Apple Computer.

Gartner forecasts unit shipment growth will fall from an annual average from 2003 to 2005 of 11.3 percent to an annual average from 2006 to 2008 of 5.7 percent. For the same time periods, Gartner forecasts revenue growth will fall from an annual average of 4.7 percent to an annual average of 2 percent.

About the Author

Scott Bekker is editor in chief of Redmond Channel Partner magazine.

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