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PCs aren't coming to America

Slow PC growth in the United States during the third quarter leads IDC to downgrade its expectations for the full year.

PC companies had a tough time doing business in the United States during the third quarter this year, according to new data from IDC.

PC shipments to the U.S. were flat in the third quarter compared to last year, after they grew by almost 5 percent in the first part of 2006, said Loren Loverde, an analyst with IDC. Corporations simply aren't replacing their PCs with as much vigor as they did from 2003 to 2005, when U.S. shipments grew at about a 10 percent clip, he said.

Poor performances by several PC vendors during the quarter didn't help, Loverde said. Hewlett-Packard posted a strong quarter, but companies such as Dell, Gateway and Lenovo all did worse than they would have hoped. Since Dell accounts for about one-third of all PC sales in the U.S., any hiccup at that company is going to have a noticeable effect on the overall numbers, he said.

Therefore, IDC is downgrading its growth forecast for the U.S. market this year to just 3.5 percent. Last year, U.S. PC shipments grew by 9.6 percent. The news comes despite word that retail PC shoppers in the U.S. are snapping up notebook PCs this holiday season.

The PC market is in a state of transition fueled by the notebook craze, the pending debut of Microsoft's Windows Vista, and the strong demand for PCs in emerging economies, Loverde said. The worldwide market for PCs is expected to grow by 10.4 percent this year, and overall growth is expected to remain above 10 percent over the next few years.

However, while U.S. growth is expected to rebound in 2007 to 6.9 percent, double-digit growth numbers aren't on the horizon. Corporate PC buyers tend to replace their systems every three to four years, and the buying frenzy from 2003 to 2005 suggests that the PC market is in store for a bit of a lull, especially as corporations hold off upgrading to Vista until they have put it through the paces, Loverde said. Corporations aren't expected to start adopting Vista en masse until 2008.