More, Cheaper PCs
Lisa DiCarlo, 08.11.05, 3:00 PM ET
NEW YORK - PC makers keep selling more PCs ever more cheaply.
As a result, in terms of raw dollars, the worldwide PC market is expected to be flat this year, even while unit shipments grow at a steady clip. This suggests that decade-long price declines and a relentless drop in component prices, which have driven most PC makers out of the market, continue unabated.
According to IDC, the U.S. PC market will grow a mere 1% this year, while some analysts such as Bank of America Securities predict unit growth of more than 13%. As usual the PC company bucking the trend will be Dell (nasdaq: DELL - news - people ), which reports its fiscal second-quarter numbers after the bell today.
Dell is expected to report sales growth of 16% to 18% for the quarter, reaching about $13.7 billion, and earnings per share between 37 cents and 39 cents, compared with 37 cents a year ago. The only line item that saw a year-over-year decline last quarter was Dell's research and development spending, which totaled .08% of revenue, down from 1% a year ago.
IDC's worldwide tech spending forecasts call for 5% to 6% increases annually through to 2009. Dell has consistently grown faster than the market in most product segments, and indeed continues to grow in countries it considers strategic. But total revenue by region has remained relatively constant: Americas pull in 64% of sales; Europe, Middle East and Africa 24%; and Asia Pacific/Japan 12%.
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