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Commentary: Dell still has room to sell traditional PCs

Gartner's market research data shows that the U.S. commercial PC market is saturated, with about 71 million potential users and expected shipments of 33 million units in 2000.

By Martin Reynolds, Gartner Analyst

Gartner's market research data shows that the U.S. commercial PC market is saturated, with about 71 million potential users and expected shipments of 33 million units in 2000.

Although an immensely valuable market, growth in this area is slowing down, and PC manufacturers have to turn to other geographic regions and products such as servers for growth.

See news story:
Dell earnings under the microscope

European market growth--Dell Computer's strongest geography, after the United States--grew at just 6 percent in the second quarter of 2000. However, the Asian market is exploding and provides the opportunity for Dell to gain substantial market share in coming quarters.

The threat of alternative platforms is not a real one. Of primary importance is that the most successful devices require a PC to be at their most effective.

Secondly, although combination handheld computers and cell phones may be the main conduit to information technology for the second wealthiest billion people in the world, the PC, or a similar device, will remain the preferred connectivity device for the first billion.

The challenge to PC manufacturers, therefore, is to make their products affordable and available to the first billion. That gives the market a few more years to run.

After that, the incremental value of each customer becomes more of a challenge: the likely result is fewer PC manufacturers.

(For related commentary on PC vendors selling desktops online, see TechRepublic.com--free registration required.)

Entire contents, Copyright © 2000 Gartner Group, Inc. All rights reserved. The information contained herein represents Gartner's initial commentary and analysis and has been obtained from sources believed to be reliable. Positions taken are subject to change as more information becomes available and further analysis is undertaken. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of the information. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof.