Unprecedented demand for notebooks helped push up UK PC sales by almost 17 per cent year on year in the final quarter of 2004.

According to the latest market research from IDC, 2004 was a "strong year" for the PC industry. Some 2.6 million units were shipped in the final quarter, more than a third of which were notebooks.

The notebook market continued to be the key growth driver, expanding by two thirds year on year, while desktop and x86 server sales grew by 9.1 per cent and 13 per cent respectively.

"Despite national economic statistics suggesting a slowdown in retail sales towards the end of the quarter, consumer PC shipments drove overall market growth in the fourth quarter of 2004," said Ian Gibbs, senior research analyst at IDC's European Personal Computing group.

"While the Christmas shopping season provides a traditionally strong boost to home computing demand, growth was also maintained in the business markets."

The study found that competition between, and within, the direct and indirect channels continued to intensify during the fourth quarter, driving down consumer PC prices and stimulating demand.

Although consumer demand for notebooks continued unabated in the Christmas quarter, growing by over 50 per cent year on year, the desktop market still maintained healthy volumes, primarily as a platform for home digital entertainment and productivity.

According to IDC, Microsoft's Media Center PCs accounted for low volumes in the desktop market, facing stiff competition from digital TV hard drive recorders and recordable DVD players.

After two quarters of outgrowing the commercial notebook market, the study reported that commercial desktops returned to more sustainable growth levels during the fourth quarter, recording an expansion of 7.8 per cent year on year.

Corporate renewals and upgrades to Windows XP continued to drive growth, with the top-tier vendors bidding fiercely for tenders with large accounts.

In terms of form factor, micro-towers remained the desktop of choice for small and medium business users, while large businesses preferred smaller form factor systems with corporate features. Commercial notebook shipments grew by a quarter year on year.