PC price war looms

PC price war looms

Mobile and desktop PC prices in the US will drop this year as direct PC vendors reduce profit margins and ignite an "intense battle for market share", according to market research firm Gartner.

According to the analyst, Dell and Gateway will endeavour to win market share from big channel vendors like Compaq, Hewlett-Packard and IBM.

The direct vendors' weapon will be lower margins, causing "others to give serious thought to how they run their PC business", said Gartner's Dataquest Group vice president and research fellow Martin Reynolds in a statement. Global vendors might shift their share from the US, he said, leaving the national vendors out in the cold.

Despite the economic slowdown, Dataquest forecasts a 10.7 per cent growth in desktop and mobile PC shipments for 2001. However, the researchers warned that if "concerns about recessions in the US and world economies were to be realised, PC shipment growth could fall into the single digits for 2001".

Further into the future, Dataquest is currently forecasting a sequential growth of 14.5 per cent to 165.5 million units shipped in 2002. After that, growth will dip to 8.6 per cent, 179.7 million units, in 2003 and pick up a bit to 9.7 per cent, or 197.2 million units, in 2004.

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