PC Spending Expected to Increase in 2003

PC sales are expected to pick up speed early in 2003, according to a new report from Meta Group.

While PC purchasing levels won’t return to the blockbuster numbers they rang in three years ago, a mild increase is expected in the first quarter of the year based on clients’ moves to buy, according to Steve Kleynhans, an analyst at Stamford, Conn.-based Meta Group.

“Organizations want to migrate their remaining desktops off Windows 95 and Windows 98, and they are realizing that their older machines — typically Pentium IIs and Pentium IIIs — are unsuitable for Windows XP or 2000, and upgrading is too expensive,” says Kleynhans.

And while PC sales are expected to top figures from the past 18 months, corporate buyers will continue to hold tight to what’s left of their shrunken budgets. Kleynhans says IT administrators will be ordering new PCs for their users but they won’t be buying top-end.

“They will find that even modestly configured current systems will be sufficient for nearly all users,” he adds. The need for middle-of-the-road systems may mean that administrators aren’t looking to sharply upgrade their software any time soon either.

Meta analysts are advising IT shops to remember that it’s clearly a buyer’s market right now, and this is the time to pressure vendors for better pricing and terms. They also are warning that while it’s a good time to replace old PCs, it may not be the right time to move to flat-screen monitors. The best pricing for flat screens, according to Meta, is on 15-inch screens, which are not best suited to multi-tasked or heavily graphical applications. Meta is predicting that the prices for 18-inch flat screens should fall to about $500 by mid-2003.