Charles Smulders Continue Quotations

Around mid-2005 we started to see the growth in the replacements that had increased, begin to slow and it'll continue to lessen as we move further into 2006. We expect the average system price to continue to fall and though Q4 unit numbers aren't strong, there remains strong pricing pressure.

It continues to be a very difficult market, and until we see an economic upturn, we should continue to expect that to be the case.

Strong market growth continued to be driven by lower prices and mobility in the third quarter. These factors sped up new PC adoption and replacement activities. Overall market growth exceeded expectations, with home demand for mobile being particularly strong.

Vendors will continue to look for ways to reach new audiences. The key determining factor on channel choice is profitability. I don't think we will see Dell moving into third-party retail anytime soon for that reason.