PC vendors aren't enjoying as much growth as last year, but shipments in 2005 should finish well above previous expectations for the year, market researcher IDC has confirmed.

Strong consumer demand in Europe and Asia should allow PC vendors to ship around 110 million units in the last six months of the year, IDC said. Should that come to pass, PC vendors would have shipped 204.6 million units for the full year, a 14.1 per cent improvement over 2004 shipment totals.

In 2004, PC vendors improved their worldwide shipment totals by 15.3 per cent over the previous year. Earlier this year, IDC forecast that full-year growth in 2005 would ease back to 11.4 per cent as both businesses and home buyers reached the end of a three-year spending spree on PCs. The growth in worldwide shipments to corporations is still expected to fall, from 16.3 per cent in 2004 to a forecast of 11.7 per cent for 2005.

Europe and Asia - new growth markets

However, while the US market has slowed slightly, IDC underestimated the appetite of PC purchasers in Western Europe and Asia when making the earlier forecast. Worldwide growth in consumer PC purchases is expected to be 18.3 per cent, up from 13.5 per cent last year, even though growth in consumer shipments to the US should fall, from 8.9 per cent last year to a forecast of 7.3 per cent this year.

Notebooks continue to drive much of the worldwide demand for new systems, even in markets such as the US and Japan where notebook adoption is already very high, IDC said. Corporate IT departments had led the trend toward notebooks over the past few years, but home users are now snapping up portable PCs at a faster rate, according to IDC's data.

Per unit profits decline

One sour note for vendors, if not purchasers, is that the growth in shipment value is not rising nearly as quickly as the shipments themselves, IDC said. Pricing is extremely competitive at the lower end of the PC market especially in the second half of the year, when many students around the world head back to school and gift-givers start making out their holiday season shopping lists.

IDC is still predicting that growth around the world in 2006 will slip just below 10 per cent.