In some sense, the desktop market is being hit with a double whammy.

Initiatives like those done at Intel could ease the constraint of some barriers. But it's still a slow process.

The next two years will produce a turning point for the PC industry.

It's a very competitive environment in terms of pricing, and vendors began running out of room.

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.

The bread and butter of the industry are the mature markets, but because of the falloff in replacement activity, vendors are going to have to go out and look for growth elsewhere. That's the challenge for the industry.

Thanks to pricing and innovation in form factor and battery life, mobile PCs are appealing to a wider range of users.

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.

The quest for growth is forcing vendors to test the limits of PC price elasticity. The whole dynamic is compounded by the fact that buyers have increasingly come to expect sharp price declines.