Research: PC sales outlook sunny for rest of ’07

July 25, 2007, 1:06 PM UTC

PC sales, led by continuing growth in laptops and a surprising resurgence in desktop strength, are expected to be strong in the second half of this year, research firm iSuppli said. The firm expects unit shipments to be up 13 percent over last year’s second half.

If iSuppli is right, that’s particularly good news for Microsoft (MSFT), which is gearing up for its first holiday season of Windows Vista sales. iSuppli also said it expects Hewlett-Packard (HPQ) to maintain its sales lead over rival Dell (DELL), while Lenovo and and Acer battle for third place.

Even with unit sales generally up though, there’s plenty of intrigue heading into the holiday season. Dell is back on the warpath with HP, having inked deals to sell mid-tier laptop and desktop models in Wal-Mart (WMT) stores. Through about 3,500 Wal-Mart and Sam’s Club stores in the U.S. and Canada, Dell will sell two desktop multimedia bundles for less than $700; both bundles include the mid-range Dimension E521, and one will include a 19-inch LCD monitor. They compete directly with a SKU that HP had offered through Wal-Mart.

The effect of this projected sales strength is less clear for chipmakers Intel (INTC) and Advanced Micro Devices (AMD). Both companies last week reported earnings that were under pressure from chip margins, and there are no signs that PC makers plan to sell a higher-end mix of boxes. Intel executives even indicated that consumer laptops, which were once a safe haven for chip profits, are now becoming just as competitive as desktops.

Below, iSuppli’s chart showing the percentage breakdown in PC unit shipments between the first and second half of the year; there are traditionally more shipments in the second half, particularly in the fourth quarter.

             

 

Worldwide Splits for PC Shipments (% of Unit Shipments) ’03-’07

 

  2003 2004 2005 2006 2007

 

First Half 46.6% 47.7% 46.4% 47.0% 46.3%

 

Second Half 53.4% 52.3% 53.6% 53.0% 53.7%

 

Source: iSuppli, 7/07