Australia's PC market is continuing its downward spiral recording negative year on year growth of 21.5 per cent over the corresponding period for 2000.
Growth for this quarter (ended October 30) has declined by 5.1 per cent according to Gartner's Dataquest Asia Pacific.
This is the second consecutive quarter the Australian PC market has recorded double-digit negative growth year on year.
Despite dropping prices, Gartner's Dataquest PC analyst Andy Woo said vendors are finding it increasingly tough to convince end users to upgrade their systems.
"The deployment of new PCs is not on the priority lists of most end users as corporate budgets continue to tighten; users are adopting a cautionary approach in light of all the uncertainties in the market," Woo said.
Hardware performance continues to outpace most common application requirements and as a result the life span of a box is also extending.
"The bottom line is that the market will not see much improvement for most of the year. Windows XP will excite the home market and cheaper Pentium machines running on the 845 chipset will stir the professional market, but it won't be enough to create any critical mass needed to kickstart the overall PC market," he said.
Dell knocked Compaq off the top spot in the local market for the first time with year-on-year growth of 38.5 per cent.
HP and IBM's performance have not improved much from last quarter as year-on-year growth continues to decline by 60 per cent and 48.1 per cent respectively.