Leading market research firm Gartner Inc. said the market of personal computers would grow only 9% year-over-year in 2005, down from 11% in 2004. The company said the reason for growth slowdown was the approaching end of major PC replacement cycle among business and home users.

Gartner expects PC shipments to total 199 million in 2005, up 9% from 183 million in 2004. Market growth in 2004 was 11.4%. Gartner projects mobile PC shipments to drive market growth by increasing 17.4% in 2005. Meanwhile, desktop PC shipments are only forecast to grow 6.1%.

“We believe professional replacement activity peaked in 2004 and will decelerate sharply over 2005. While home replacement activity will continue to provide some strength to the market in 2005, it too seems likely to slow by year-end,” ," said George Shiffler, principal analyst for Gartner’s Client Platforms research.

“Even so, mobile PC unit growth should outpace desk-based growth considerably again this year. Mobile PCs are becoming increasingly attractive to a broad range of users. There are a number of reasons for this including rapidly falling system prices, enhanced wireless experiences, and expanded multimedia/entertainment functionality,” Mr. Shiffler added.

The research firm believes that PCs with trendy design, easy interoperability with various media devices and rich multimedia capabilities could receive a warm welcome from home users, which might catalyze higher PC market growth going forward. But the company is sceptic about the so-called Media Center PCs because of their price, ease-of-use and ability to connect to other consumer electronics devices.

“Media PCs remain relatively expensive and suffer from spotty reliability as well as troublesome ease-of-use. PCs are also handicapped by low interoperability with other media devices and poor aesthetics. This is hurting their ability to compete against alternative devices that are both cheaper and more readily connected to media sources,” said Kiyomi Yamada, analyst for Gartner's Client Platforms research.

Leading supplier of microprocessors for personal computers – Intel Corp. – has been talking about convergence of PCs, communications and consumer electronics for years now. The chipmaker, along with software giant Microsoft Corp. have been driving various initiatives that enable so-called digital home for a while, but the mainstream market has not yet jumped on the bandwagon mainly due to high pricing and relatively poor interoperability with presently used consumer electronics.

Another market research firm – Petrov Group – recently said the changes in the PC market and PC usage models of computers and consumer electronics pose new opportunities for companies like IBM to enable the new generations of computers, which may lower the dominance of Intel-Microsoft eventually.