PC Sales Surpass One Billion

The PC industry has reached the milestone of 1 billion PCs shipped since the advent of personal computers just over 25 years ago, according to research from Gartner and Intel.

And the next billion will take just six years to sell, as high-growth markets emerge in China, Latin America, and Eastern Europe, Gartner says.

But with "the wealthy heart of the PC market [the U.S. and Europe] consumed," vendors will have to lower prices to tap developing markets, in an industry which is already fiercely price-competitive, Gartner says.

Last week, Gartner said that unit prices of PCs in the Asia-Pacific region (excluding Japan) will fall 5.4 percent per year from $1,161 now to $881 by 2006.

In 2000, the industry's best year to date, around 132 million PCs were shipped worldwide, and the industry is expecting a similar figure in 2002 as the market rebounds from a weak 2001.

Further consolidation of PC vendors is likely as rivals try to match the strength of Dell Computer and Hewlett-Packard, which will be two of the industry's driving forces. Dell's direct sales model has enabled it to achieve very low level of selling, general, and administrative expenses which other vendors are struggling to match, Gartner says.

The PC industry--which in 2001 saw a decline in sales for the first time since 1985--will receive a boost when there are widespread broadband communication connections at data rates in excess of 10 mbps to households, according to Gartner.

In that environment, the PC will become an appliance managing all household communications and entertainment, at the center of a range of low-cost devices that form an extended network, Gartner says.

The personal computer landscape has changed a great deal since the first personal computers were introduced in the early 1970s--to a level which would have seemed to those early users as science fiction, Gartner says.

Claimants to the title of the first personal computer--desktop-sized, programmable, affordable, and simple to use--include the HP 9830, introduced in 1972, with the BASIC programming language in ROM, but the 9830 cost $5,975, according to vintage computer Web sites.

A French machine called the Micral followed in 1973, as did the Xerox Alto, which featured a mouse, a graphical user interface, an object-oriented OS, and development tools, and fast networking with the first Ethernet cards.

The 1975 MITS Altair 8800 is regarded as the first commercially successful and widely available personal computer, and was also the first PC to run software developed by fledgling Microsoft. The Altair contained an Intel 8080 chip with a clock speed of 2 MHz, while today's high-end Pentium P4 machines have a clock speed of 2.53 GHz, more than 1,000 times as fast.

The $1,295 Apple II (1977) and the $2,880 IBM PC Model 5150 (1981) started the rapid growth of PC sales, but it took the market almost 15 years to cross the 50 million units per year mark (in 1995) and just another four to cross the 100 million per year mark.