With the PC upgrade cycle pushed back several months, PC and electronics manufacturers worldwide are expected to suffer lower revenues this year as a result of the delay.
The delays will be felt primarily in the early adopter market, Hyundai's Jay Kim commented today. "We assume that shipments of high-end PCs will shrink 20 per cent compared to previous estimates," he said.
Windows Vista is expected to place much higher demand on memory and graphics cards compared with the capabilities of current mid-range PCs.
Because such substantial upgrades will encourage many users to buy a new PC, the launch of Vista, when it does come, is expected to provide a much needed shot in the arm for beleaguered manufacturers of a wide range of products.
In addition, the hype surrounding the launch, and Microsoft's heavy promotional spending, will help boost sales.
The news will also disappoint many others, including chip manufacturers. DRam makers, like Taiwan's Nanya Technology, had been looking to the release of the new memory-hungry operating system to boost moribund DRam prices at the end of the year, Digitimes reported in a summary of local media stories earlier this week.
"The memory capacity of mid- to high-priced PCs will diminish three to five per cent relative to previous estimates," said Kim.
But this will put only a temporary dent in the continuing upwards trend in DRam demand, according to the analyst. "Even without Windows Vista, increasing demand for higher memory capacity remains intact," he said.
KGI Securities in Taipei has reported that almost all manufacturers are now losing money on production of 17in LCD monitors. The company predicted earnings shortfalls for panel makers as result of steep price declines.
In addition, over-production in the value sector of the LCD TV market has led to an oversupply of 32in panels, which is pushing flat panel TV prices down.
"Some 32in panels are $500 or lower, down from $540 in February," KGI analysts commented in a research note released today.
KGI predicts that the current slide in LCD prices will slow in the second half, as manufacturers adjust more efficiently to market demand.
In related news, research firm DisplaySearch has raised its forecast for 2006 global LCD TV shipments to 42 million units, double the figure for 2005.
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