PC vendors have succeeded in increasing the unit share of higher-margin mobile PCs. But this has resulted in a significant sacrifice of desk-based revenue as vendors struggle to maintain the value proposition of desktops at the low end of the market.

As recent earnings announcements illustrate, vendors are facing strong competitive pressures. These pressures are only likely to intensify if unit growth slows. Vendors may have little choice other than to cut prices or offer more lower-cost, de-featured machines.

You're seeing price drops and government-sponsored initiatives in many countries, in an effort to get PCs in. But you're still facing low per capita income and an immature economic structure.

Vendors are likely to see a fundamental shift in the market as they come to grips with the steep decline in mature-market desk-based growth and are forced to seek growth in other market segments.

People need to be convinced that it's a must have, and it's not clear that it is.

End-user concerns about availability and value of these new technologies could result in some buyers holding off PC purchases until later in 2006 or beyond.