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PC Market Demand to Remain Strong

The persistent strong demand in international markets that boosted second quarter growth in the worldwide PC market has also raised expectations for the second half of the year. According to the latest forecast from IDC's Worldwide Quarterly PC Tracker, total PC shipments in the second half of 2005 are now expected to reach nearly 110 million, with growth of 12.9 percent versus a May target of 107.2 million and growth of 10.4 percent. The biggest drivers in the second half are likely to be the consumer segments in Western Europe and Rest Of World (including Central and Eastern Europe, Middle East and Africa, Latin America, and Canada) with an important contribution from portable PCs. Consumer markets in other regions as well as the commercial segment will also contribute.

"We continue to see remarkable growth in the consumer segment and in emerging markets," said Loren Loverde, director of IDC�s Worldwide Quarterly PC Tracker. "Low prices combined with low penetration, recovering or growing economies, and general investment in technology continue to fuel rapid growth in these markets. While we expect the Euro to weaken against the dollar and PC growth rates to slow from recent quarters, we still anticipate strong growth for another couple quarters."

With the strong second half of the year, total shipments for 2005 are expected to reach 204.6 million on growth of 14.1 percent - slightly below 15.3 percent growth in 2004, but up from a May projection of 11.4 percent. Total shipment value is expected to rise only 5.8 percent to $211.6 billion for all of 2005. For 2006-2008 shipments are expected to grow by roughly 9 percent before slowing to 8.3 percent in 2009. Growth of shipment value is also expected to slow, although it should remain positive throughout the forecast.

"The outlook for the U.S. market remains unchanged for 2005, despite a stronger than expected second quarter," said Bob O'Donnell, vice president Clients and Displays at IDC. "A combination of factors that include high crude oil prices, some component shortages, and limited decline in average prices will likely prevent the U.S. market from repeating its strong second quarter performance."

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