While the Australian PC market grew an impressive 14.6 per cent in 2005, Gartner is reporting shrinking price tags and vanishing margins are creating a market fit for consolidation at all levels.
The 2006 PC market will be a case of survival of the fittest, client platform group principal analyst, Andy Woo, proclaimed.
"There will be consolidation this year, no question about it," he said. "Resellers and vendors - even at the high end of town - will look at consolidating. It's getting tougher and tougher."
If there was an upside to the market's woes, it falls in favour of consumers.
"It is a buyer's market, definitely," Woo said. "The sales are there, but the margins are shrinking - even for tier one resellers who aren't quite as affected as the tier two 'mum and pops' even though they can squeeze the vendors more."
PC resellers were lucky to make $100 out of a PC sale without up-selling buyers to a flat screen monitor or an extended warranty contract, Woo said.
According to Gartner's latest PC figures, the rise of laptops was starting to have a significant impact, growing 40.7 per cent last year compared to 2004.
"Everything is working for mobile PC at the moment - pricing has been extremely aggressive and mobile technologies continue to evolve to meet end users expectations," Woo said.
Overall, HP retained its number one position with 16.5 per cent market share, followed by Dell (13.5). Acer moved into third position (11.3). Lenovo (6.6) and Toshiba (5.6) rounded out the top five.