Replacement purchases will drive worldwide PC shipments to 186.4 million units in 2004, a 13.6% increase from 2003, according to a preliminary second quarter forecast by Gartner.

Gartner analysts expect almost 100 million PCs to be replaced in 2004 and nearly 120 million more to be replaced in 2005. The volume of replacements this year and next year will surpass the number of systems replaced in the run-up to Y2K in 1998 and 1999.

“Our first quarter results suggest the Y2K replacement cycle that vendors have been anticipating for more than a year is under way,” said George Shiffler, principal analyst for Gartner’s client platforms research.

“More than 30 % of installed PCs are now at least three years old. Many, if not most of these PCs, are using older Windows operating systems (OS) that are no longer supported or are about to lose full technical support. Expiring OS support will play a significant role in driving PC replacements going forward,” Mr. Shiffler said.

Healthy global economic growth is also expected to boost new PC sales. In 2002 about 137 million of PCs were purchased. In 2003 approximately 167 million personal computers were sold.

“Recent economic forecasts anticipate even stronger growth throughout 2004 for the United States, Asia/Pacific and Japan, despite persistently high oil prices and the threat of increased geopolitical uncertainty,” said Kiyomi Yamada, industry analyst for Gartner's client platforms research.

“Stronger economic growth will almost certainly influence PC sales for the rest of 2004,” Mr. Yakamada explained.

PC shipments for the second quarter of 2004 are projected to increase 14.3% from the second quarter of last year.