World PC shipments will grow 12.7% to 206.6 million in 2005 and will continue to increase 10.5% to 228.29 million in 2006 according to analyst Gartner.
The analyst predicted total sales values of PCs shipped will drop slightly in 2006 by 0.4%, further illustrating the price pressures PC makers and resellers are continuing to face.
Wal-Mart-owned Asda put on sale this week a relatively powerful consumer PC for only £279. Earlier this month the company behind the Time and Tiny PC brands went bust.
Gartner said suppliers were now looking to cut their costs by bundling less memory and smaller hard disks with some of their PCs, as well as cutting back on other features.
However, as users look to take advantage of more demanding PC applications such as CD burning, video editing and emerging broadband TV, this cost-cutting may prove tricky for suppliers.