Despite adjusting upward growth forecasts for the world's personal computer (PC) sector for this and next year, the overall development of the PC market is actually slowing down, Merrill Lynch said yesterday.
"We are raising our 2005 and 2006 PC unit growth forecasts due to better-than-expected second-quarter performance and the accelerated trend to mobility," Merrill Lynch analyst Steve Milunovich said in a report released yesterday.
Aggressive pricing, driven by lower component costs, prompted end users to accelerate buying during the first half of this year, the market watcher said.
Accordingly, the US securities house raised its forecast for PC unit growth worldwide to 11 percent this year from 9 percent previously, and to 7.5 percent next year, up from 6 percent.
Deceleration
But despite the rosier forecasts, growth in the global PC market is actually decelerating, the firm said.
"The days of double-digit PC unit growth are over," Milunovich said, adding that the company believes that PC unit growth peaked last year and should slow through next year.
Meanwhile, the analyst also expects worldwide PC revenue growth to slow to 1 percent this year, down from 6 percent last year, as aggressive component price declines have filtered through to end users, causing the average unit price to decline by 9 percent this year, the report read.
Revenue growth could improve slightly to 2 percent next year, as the decline in the average unit price is expected to ease to 5.6 percent and price cuts in emerging markets will be moderated compared to the worldwide average, he said.
Replacement demand
Looking forward, Merrill Lynch expects replacement demand to be the only driver of PC unit growth. Growth could reaccelerate in 2007 following the release of Microsoft's new Windows Vista OS, the research house said.
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