Gartner Slightly Raises Its PC Forecast Based on Stronger Mobile PC Sales; But Vendors Still Face Significant Challenges With Slowing Replacement Activity.

STAMFORD, Conn. -- Worldwide PC shipments are forecast to total 202.1 million units in 2005, a 10.2 percent increase from 2004, according to a preliminary forecast by Gartner, Inc. Gartner analysts previously projected worldwide PC shipments would increase 9.9 percent.

Worldwide mobile PC shipments are expected to grow 26.5 percent in 2005, while deskbased units are now forecast to grow 4.6 percent. Mobile PCs currently make up just under 30 percent of all PC shipments.

"Mobile PCs are continuing to attract more new users as mobile prices fall and wireless becomes more pervasive," said George Shiffler, principal analyst for Gartner's Client Platforms research. "Growing numbers of users are replacing their old desktops with more portable mobiles, and this is one of several factors helping to boost mobile PC growth."

Gartner analysts said they see few new technology drivers that could help stimulate PC sales in 2005.

"Dual-core processors will attract some attention, but they will mostly pique the interest of 'techies' and early adopters," said Mikako Kitagawa, principal analyst for Gartner's Client Platforms research. "Many applications that take full advantage of dual-core capabilities are still being developed and won't be available until next year at the earliest."

Replacement activity has helped drive double-digit PC growth over the last two years, but Gartner analysts said replacement activity will begin to wane this year.

"Professional replacement activity is in the process of peaking and will fade rapidly over the rest of the year," Mr. Shiffler said. "Meanwhile, home replacement activity is expected to peak early next year and fade more gradually over 2006." He added, "This one-two punch will push market growth back into single-digits by next year despite stronger mobile PC growth."

Additional information is available in the Gartner report "2Q05 Update: Global PC Forecast Scenarios, 2005-2006." The report provides preliminary projections for the worldwide PC industry, both on a revenue and shipment basis. This document is available on Gartner's Web site at http://www.gartner.com/DisplayDocument?ref=g_search&id=481182.

About Gartner

Gartner, Inc. (NYSE: IT and ITB) is the leading provider of research and analysis on the global information technology industry. Gartner serves more than 10,000 clients, including chief information officers and other senior IT executives in corporations and government agencies, as well as technology companies and the investment community. The Company focuses on delivering objective, in-depth analysis and actionable advice to enable clients to make more informed business and technology decisions. The Company's businesses consist of Research and Events for IT professionals; Gartner Executive Programs, membership programs and peer networking services; and Gartner Consulting, customized engagements with a specific emphasis on outsourcing and IT management. Founded in 1979, Gartner is headquartered in Stamford, Connecticut, and has over 3,900 associates, including more than 1,100 research analysts and consultants, in more than 75 locations worldwide. For more information, visit www.gartner.com.