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PC shipments to rise 11 percent in 2008

Most PCs bought today are replacement machines, but shipments and revenue are still on the upswing.

Worldwide PC shipments will hit 293 million units in 2008, up 10.9 percent from 2007, due in part to sales in emerging markets, Gartner said Tuesday.

And although price cuts will occur, revenue will grow around 6 percent for the year, George Shiffler, research director at the firm, said in a phone interview.

That's a good sign. In recent years, revenue has stayed flat from year to year despite unit shipment increases. In 2003, for instance, a then-record 152.6 million PCs were shipped, but they carried an estimated value of $175 billion, or about the same as the the 136.7 million PCs shipped in 2002.

Both the revenue and unit shipment figures also refute the argument, which we've heard about every three months since 1997, that the PC market is dead. PC shipments have increased nearly every year over the past three decades.

There are, of course, danger signs. The weakness of the American economy could hurt PC sales, and there's a rising possibility of a slowdown in China after the orgiastic buying spree leading up to the Olympics.

Emerging nations continued to be a big factor in the market. PC shipments to emerging markets grew 22 percent in the fourth quarter of 2007, accounting for 60 percent of worldwide PC unit growth. PCs started to sell in significant numbers to emerging nations at the start of the decade, but most of the PCs went to urban hubs like Beijing and Bangalore, India. By 2004, manufacturers started to more actively come up with designs and distribution strategies to better target these nations.

But desktops also surprisingly look strong. The last desktop replacement cycle occurred in 2004 and 2005. Those machines are not old. Another replacement cycle should occur from late 2008 to early 2010. Replacement sales account for nearly 60 percent of PC shipments worldwide and 80 percent in the states, according to Shiffler. (And make me want to break into song: "In the year 2525, PC shipments will cross the 17.8 billion mark, according to industry figures.")