Gartner is predicting that slower growth and reduced profits will squeeze three of the top ten personal computer manufacturers out of the market by 2007.
NewsFactor reports that Gartner said: "While manufacturers as a whole have enjoyed double-digit sales growth in recent years, there are clouds on the horizon."
Gartner research VP Leslie Fiering said: "Global vendors will be forced to continue maximizing supply chain efficiencies and, finally, abandon any efforts to differentiate other than on price and service levels."
According to an Associated Press report, Gartner did not say which candidates would be likely to depart, but suggested many are vulnerable.
The only computer vender that Gartner seems confident will survive the slump is Dell. Gartner said: "Dell is the only consistently profitable global computer vendor in the past several years."
The top 10 worldwide vendors, in order of units shipped, are Dell, HP, IBM, Fujitsu, Fujitsu Siemens, Toshiba, NEC, Apple, Lenovo Group and Gateway.
It should not be taken that those companies further down the list are the ones most likely to be affected. Despite their high positions in the list, Gartner notes that the personal computer divisions of HP and IBM are "vulnerable to being spun off if their drag on margins and profitability are deemed too great by their parent companies".
Although its PC shipments are fewer, China's Lenovo, "appears positioned to leverage their strong local-market standing and low operating costs into a global presence by acquiring local rivals", according to Fiering.
Fiering added: "Vendors that have yet to do so may attempt to diversify into related markets, such as consumer electronics, to bolster margins. Others may attempt mergers with rivals to improve margins through economies of scale."
Gartner forecasts that PC growth, by unit, will average at 5.7 per cent annually from 2006 to 2008. This is half the 11.3 per cent average growth of 2003 to 2005.
Fiering said: "2005 should be a reasonably strong year for PC vendors. However, the end of the replacement cycle is likely to strain viability for even the largest PC vendors in 2006 and beyond."