Desktop PCs are bouncing back

Desktop computers are suddenly hot again, seeing double-digit growth in the new year.

Last month, desktop PC sales grew 30 percent in units and 33 percent in revenue compared to February 2008. In three of the last four months, total desktop revenue -- including Macs and PCs -- outpaced laptops. “Desktops have been the surprise consumer technology growth category of 2010,” said Stephen Baker, NPD's vice president of industry analysis.

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A big driver for desktop PCs, according to market researcher The NPD Group, is Windows 7. Before Microsoft released its latest operating system, Windows-based desktop sales declined in 21 of the previous 22 months. But Baker noted that Mac sales have been strong as well, with "tremendous growth numbers from the iMac after a few lackluster quarters from Apple."

Part of desktop PC's new edge over notebooks is simply due to pricing changes. The rise of netbooks drove the average price of portable computing down, and even notebook prices have fallen as a result, Baker notes in a blog post. In the sub-$400 range, there were almost as many notebook sales in February as netbooks. In essence, notebooks have become the new entry-level PC, taking the low-cost throne that desktops once occupied. The average selling price of desktops in February was $670, compared to $602 for notebooks.

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But price differences alone don't explain the increase in desktop unit sales. One theory from Baker is that it's merely time to replace aging Windows XP desktops, but he also suggests that the media sharing features Microsoft is promoting as part of Windows 7 has led to increased popularity of home theater PCs. I'll venture a guess that the rise of online video sites, such as Hulu and YouTube, have made the computer set-top box an attractive addition to the living room.

While this is obviously good news for the industry, there's probably some benefit to consumers as well. With desktop PCs avoiding their doomsday, maybe we'll see some more exciting set-tops, all-in-ones and towers as manufacturers become more confident in the category.

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