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3/20/2007
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Gartner: PC Sales To Get A Minor Boost From Windows Vista This Year

Microsoft's latest operating system doesn't have enough must-have appeal for SMBs, and larger companies must thoroughly test and validate the new operating system before committing to a massive buy, according to analysts.

If PC makers were hoping for a big Vista-driven jump in sales this year, they're likely to be disappointed.

Market researcher Gartner said Tuesday that Microsoft's newest Windows operating system, launched in January to consumers, is expected to provide a "limited boost" at best to PC shipments. Instead, emerging markets and buyers' preference for notebooks are more likely to continue to drive sales growth.

Gartner forecasts that PC makers will ship 255.7 million units worldwide this year, a 10.5% increase from 2006. Revenue, on the other hand, is projected to increase only 4.6% to $213.7 billion, as average selling prices continue to drop.

Keeping people's wallets shut is the lack of a compelling reason to upgrade. "While Vista includes a number of interesting features, these features just don't have enough must-have appeal with the average home and SMB [small and midsize business] user to spark a significant rush of new PC sales," Gartner analyst Mikako Kitagawa said in a statement.

Gartner expects a minor increase in sales from the small number of consumers and SMBs that put off replacing older computers in anticipation of Vista's release. In general, however, the vast majority of potential buyers are expected to adopt the new operating system as they replace existing machines over the next several years.

While a slight uptick from Vista is predicted in the consumer market, the operating system is forecast to have virtually no impact on PC shipments to larger businesses this year, Gartner said. Windows Vista adoption in that market is expected to lag behind consumers and SMBs.

The reason isn't the lack of must-have features, but the insistence of large enterprise IT managers to thoroughly test and validate the new operating system against business applications before it is widely deployed. Gartner expects large businesses to delay widespread deployment until at least the middle of next year, which is about the time they're expected to begin a new replacement cycle.

Meanwhile, Gartner rival IDC on Tuesday predicted that PC desktop shipments would post a compound annual growth rate of 3.8% from 2006 to 2011, and portable PC shipments would maintain a CAGR of 16.1% over the same period. As a result, mobile PCs would account for more than half of all client PCs worldwide in 2011.

Last year, total PC shipments grew 9.5% from 2005 to 227.7 million units, and revenue rose by 6.1% to $231.9 billion, IDC said. Desktop shipments were up less than 2%, while portable PC shipments grew 26.3%.

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