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Even though Microsoft Windows Vista is not going to be released widely this year, market research firm IDC believes that it will have limited impact on sales of computer makers and the market growth.

“Instead of a dramatic effect on PC shipment volumes, the delay will probably have a larger impact on PC vendor and Microsoft marketing efforts that will need to be adjusted to fit the release schedule, and that will add complexity and cost,” said Loren Loverde, director of IDC’s Worldwide Quarterly PC Tracker.

Market Continues to Grow

Following another strong performance in the fourth quarter, growth in the PC market is expected to slow to just over 10% for the next several years, according to the latest forecast from IDC’s Worldwide Quarterly PC Tracker. Although this is still relatively strong and an improvement from the November 2005 forecast, it is also notably below the growth of more than 15% for the past 2 years and will bring growth in shipment value to below 5%.

IDC continues to believe the market will slow in most regions during 2006, most notably in Western Europe, Japan, and rest of world, although total worldwide growth is expected to be at least 10.5% through 2008. This is slightly more optimistic than the November 2005 forecast, which called for growth to slip below 10% starting in 2007.

254 Million PCs to Be Shipped in 2007

The update reflects a shift of growth from 2006 to 2007 that combines the influence of stronger commercial spending in 2007 with a larger response to Microsoft’s Vista release and related developments around digital integration. Short term expectations for the United States and Japan were lowered slightly while the outlook in Europe has improved to reflect continuing portable adoption and a more gradual decline in growth. Overall, worldwide shipments of PCs are projected to grow by 10.5% in 2006 and 10.7% in 2007, compared to November projections of 10.6% and 8.9%, respectively. Total shipment volume is expected to reach 254 million in 2007 with a value of $232 billion.

“The prevailing wind driving U.S. PC market growth continues to be consumers and the passage of desktops to portables as their dominant computing platform,” said Richard Shim, senior research analyst, Personal Computing. “Declining prices, improving performance and battery life, and widescreen displays in notebooks are luring new buyers and upgrades, while stunting desktop PC growth to a trickle. This surge is contributing to the pace of overall notebook adoption and will likely bring closer the day that notebooks out ship desktops in the U.S.

Vista Delay Has No Impact

The recent delay in the release schedule for Microsoft’s Windows Vista is expected to have a limited impact on overall PC shipment volumes. IDC already expected growth to slow notably in 2006 following a wave of replacement purchases and portable adoption, so the installed base is relatively fresh. Commercial users are expected to give the new OS a thorough review before beginning any migration, although the consumer market should see a more immediate impact.

“Some consumers will certainly delay PC purchases until Vista is available, but we expect the delay to shift only moderate volume from the fourth quarter of 2006 into 2007 and will not cause a loss of sales,” explained Loren Loverde.

“The timing of the release will have some impact on when consumers buy, but not so much on whether or not they buy. In addition, we expect Microsoft and PC manufacturers to adjust their marketing and upgrade options to appeal to consumers in the fourth quarter even though the new OS won’t be ready,” Mr. Loverde added.

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