The PC market is not likely to pick up until well into next year, but the good news is that peripherals still remain the sweet spot, with sales likely to remain strong.
Components are also predicted to drive sales in the coming 12 months, with Intel's Pentium 4 chipset for use with SDRAM already having an effect on the market. Motherboards based around the 845-D chipset using DDR memory are also set to make their mark next year. The faster memory is likely to overtake demand for the more expensive RDRAM.
However, movement in the PC market is not likely to happen until the third quarter, according to analysts.
"Businesses are still being cautious," said Hakan Alac, a senior analyst at Inform. "What we are waiting for now is the next large round of upgrading. We believe that will hit in Q3 of 2002 and the market will begin to turn around then."
Alac said he didn't think the Christmas spending period would be a strong one for PC sales, but peripherals will be walking out the door. This is likely to continue into the new year, he said.
The monitor market is expected to perform particularly well. "The flat panel display market is looking strong," Alac said. "It isn't just the consumer market that is interested in the monitors; the business market is also looking to upgrade. There are a number of manufacturers concentrating on this area and so prices are now quite affordable."
Demand for Intel's Pentium 4 chipsets will continue, spurred on by its use with more affordable memory technologies.
"Sales in Pentium 4 systems will really start having an impact through January, but it will be another two quarters before we see the Pentium 4 dominate the market," Hakan said, adding that Intel rival AMD continues to hang in there but needs to remain competitive