PC vendors have succeeded in increasing the unit share of higher-margin mobile PCs. But this has resulted in a significant sacrifice of desk-based revenue as vendors struggle to maintain the value proposition of desktops at the low end of the market.
The quest for growth is forcing vendors to test the limits of PC price elasticity. The whole dynamic is compounded by the fact that buyers have increasingly come to expect sharp price declines.
End-user concerns about availability and value of these new technologies could result in some buyers holding off PC purchases until later in 2006 or beyond.
The next two years will produce a turning point for the PC industry.