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Sales up and profit down for desktop PCs

By Justin Mann

On September 18, 2006, 6:48 PM

More people are buying PCs, but they aren't paying as much for them. Research group Gartner says that for 2006, shipments of PCs are expected to increase quite a bit, but the revenue produced from the sales will decline. Desktop components are growing cheaper, sans the high-end enthusiast sector, which makes it easier for people to afford them. With lower costs, of course, you have lower margins. Price wars between giants like AMD, Intel, nVidia and ATI are also cited as reasons.

It can't continue forever, and once sales result in zero profit, companies will have to rely on a different strategy to stay in the market. In the short term, though, it's good news for the casual computer user – more product and lower cost means more accessibility.

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