Nope. Turns out that 2009 PC shipments, which were once thought to be headed for certain disaster, aren’t going to decline at all. They’re going to grow.

By 2.8 percent.

Seems that rising consumer demand for netbooks is boosting unit sales to better-than-expected levels. That said, the market value of those sales is still projected to decline.

“Blame this year’s drop in market value on the unprecedented declines in PC average selling prices (ASPs) we’ve seen this year,” said Gartner (IT) research director George Shiffler. “The rapid decline in PC ASPs reflects a marked shift towards lower price points as customers have looked for ‘good enough’ PCs at the cheapest price, and vendors have tried to spur market growth by catering to ever-lower price points. We expect PC ASP declines to slow as the market recovers, but given the market’s competitive dynamic, we don’t see PC ASPs rising any time soon. As a result, growth in the market value of shipments will significantly lag shipment growth next year and beyond.”

One last point worth noting here. Despite Microsoft’s (MSFT) claims that sales of Windows 7 have been “fantastic,” Gartner says the operating system isn’t likely to have much impact on holiday PC sales. “We just don’t see consumers buying new PCs solely because of Windows 7,” said Shiffler. “We are expecting a modest bump in fourth-quarter consumer demand as vendors promote new Windows 7-based PCs, but the attraction will be the new PCs, not Windows 7.”

According to Shiffler, “The more critical question is, ‘When will businesses make their move to Windows 7, and what will they do about replacements in the interim?’ We don’t see businesses mainstreaming Windows 7 much before the end of 2010. We think many businesses will try to shift replacements to the back end of next year so as to sync their adoption of Windows 7 with their PC refresh. That will put a damper on early 2010 shipments.”

Staggering, considering the Pixi arrived at market just four days ago, but perhaps necessary given early and widespread complaints about the device’s slow operating speed, some unfavorable reviews and the fact that the Pre–the Pixi’s more robust elder sibling–is now selling for $99.99 and $79.99 at Wal-Mart (WMT) and Amazon (AMZN), respectively.

UPDATE:

Palm’s aren’t the only smartphones being heavily discounted as we head into the holidays. Motorola’s and HTC’s are as well. Amazon is offering the Moto’s Droid for $149.99 and Overstock is peddling the HTC Eris for $49.99.

According to Oracle (ORCL) CEO Larry Ellison, Sun (JAVA) is already losing $100 million a month as it waits for regulatory approval, and judging from the price of the company’s stock today, it may be losing even more than that. Shares in Sun slid to $8.11–about 15 percent below Oracle’s offer price and a far cry from the $9.18 they hit in mid-October.

Clearly, investors are alarmed by this latest turn of events, though industry observers say there’s little reason for them to be. Morgan Stanley, for example, believes Oracle’s acquisition of Sun will win EU approval with few, if any, modifications to the MySQL database software about which regulators are so concerned.

“Based on our diligence, we believe the EC is likely to approve the deal with no remedies or remedies pertaining to MySQL’s licensing,” the research house said in a note to clients today. “It is highly unlikely that Oracle restructures the deal (e.g. spins MySQL) or walks away.”

Morgan Stanley’s call: The deal will go through and at $9.50 per share. As the firm notes, the EU hasn’t blocked a U.S.-based transaction since GE/Honeywell in 2001.

“Demand for converged mobile devices has remained strong all year,” said IDC analyst Ramon Llamas. Driving that demand: Nokia (NOK), which maintained its position as the overall leader in the converged mobile device market, Research In Motion (RIMM), whose BlackBerry made some significant share gains internationally, and Apple (AAPL) and the iPhone, whose share of the smart-phone market rose to 17.1 percent from 16.6 percent in the previous quarter (see table below; click to enlarge).

“Apple reached its highest volume yet in a single quarter,” Llamas said. “The nearly global availability of the iPhone 3GS sparked another round of annual replacements for Apple loyalists, while the lower price on the iPhone 3G put the device well within reach of customers wary of the price. Although the iPhone has struggled within emerging markets, its arrival at China Unicom this year could foreshadow greater shipment volumes.”

[Image credit: AMUSEMENT]

“The cost of smart phones is considerably higher than feature phones for which the early termination fees were created years ago at $175,” said Verizon spokesman Jim Gerace. He added that the new $350 ETF declines by $10 per month through the life of the contract and customers can avoid it by buying their devices off contract and paying full retail price.

An interesting move for Verizon (VZ), which just last year agreed to pay $21 million to settle a class-action lawsuit filed by California consumers over the very early-termination fees it is now increasing. The plaintiffs in the suit alleged that Verizon’s ETFs were illegal under California law and that they were designed to unfairly lock consumers into long-term contracts and prevent them from switching carriers. When Verizon settled the suit, it denied any wrongdoing, insisting that early-termination fees are simply a means of recovering legitimate costs. And to some extent Verizon does have a point.

Full retail price for the Motorola’s (MOT) new Droid is $559.99. With a two-year contract, Verizon sells the handset for $199.99. Theoretically, that’s a $359.99 subsidy (I have no idea at what price Verizon purchases Droid from Motorola). So if Verizon allowed subscribers to break their contract after a month without paying an early-termination fee, the company would stand to lose money. And subscribers who did so could subsequently sell the device online and potentially make a profit, though a small one.

So it’s certainly understandable that Verizon and other carriers want to protect the subsidies they dole out for these new smart phones. And as noted earlier, Verizon’s new ETF drops by $10 each month a subscriber remains under contract. But at this rate, subscribers are still bound to pay a $110 termination fee in the 23rd month of a two-year contract. The contract is nearly over, the subscriber obligation to Verizon almost fulfilled, yet the company can still slap its customers with nearly a third of the full ETF if they break it at that time.

By month 23 of a two-year contract, does Verizon really stand to lose $110 if subscribers decide to switch carriers? Doesn’t seem likely if subscribers can walk away just a month later without consequence, taking their handsets with them.

Since Verizon is pro-rating the ETF, why isn’t it doing so in such a way that it zeroes out by the end of the contract?

And isn’t the fast pace of innovation in the smart-phone sector such that prices–for both component and device–are dropping so quickly that high ETFs aren’t really justified? Remember, you can get Apple’s (AAPL) iPhone for $99 today. When the iPhone debuted in 2007, it commanded a price of $499/$599, depending on model.

I’ve put those same questions to Verizon and will update here when I hear back. In the meantime, here’s what Consumers Union policy analyst Joel Kelsey has to say on the matter: “When people want to switch wireless services, the biggest cost they face is early termination fees. These fees are designed to lock people into long-term contracts and stop them from getting better deals. Early-termination fees make the marketplace less competitive. Verizon’s move is painful proof that it’s time for lawmakers to crack down on these fees.”

UPDATE: Verizon Wireless spokesperson Nancy Stark offers the following answers to the questions I posed above:

Your first question regarding the balance at month 23 or 24 assumes that, at that point, we have recovered all of our subsidy and up-front costs for every device. That simply is not so.

On your second question, while the pace of innovation plays a role in prices coming down somewhat, it also plays a role in driving up costs as more and more complexity that customers want is added to phones–from premium HTML browsers to high-resolution MP cameras with optical zoom; videoplayers; music players; dual processor chipsets; WiFi; very high display resolution, operating systems such as BlackBerry, Windows Mobile, Palm, Android–ALL with the added value (vs a desktop) of mobility, and ALL in one tiny device that ALSO allows you to talk to anyone from anywhere. phew! (by comparison, I recently paid $200 for a camera and all it can do is take pictures, and it has only middle of the road capabilities.)

But getting back to ETFs specifically. The most important point is that Verizon Wireless customers do not have to have an ETF at all if they do not want to. ETFs allow customers to have it either way: They can have no ETF and pay full retail for their device. OR, they can get a greatly discounted device by having an ETF.

Remarking today on speculation that Cisco (CSCO) would do just that, Ned Hooper, the company’s chief strategy officer, stressed that Cisco “will always act with fiscal prudence” as it pursues Tandberg. “We strongly believe our offer is a very good price for Tandberg shareholders,” Hooper wrote, adding that the time is right for the two companies to come together.

“However, no acquisition should be pursued or completed if it runs counter to the broader principles of prudence and financial fairness,” Hooper cautioned. “Given all the speculative ‘noise’ last week,” he added, “I wanted to take the time to reiterate these points because it is important to me, and to Cisco, that all of our stakeholders understand our position as we near the end of the offer period.”

Now Hooper didn’t come right out and say it, but his message here is pretty clear: Cisco believes the 38.3 percent premium it has offered to pay for Tandberg is a fair one and is not particularly interested in raising it just to please some ornery shareholders.

And time is running out. Note that Hooper concludes his missive by explicitly pointing out that the end of the offer period is approaching.

In any event, those higher prices and the device’s lack of built-in Wi-Fi don’t seem to be as much of a barrier as you might think. And if those issues do end up tempering sales a bit, well, perhaps China Unicom can make them up by poaching iPhone users from rival China Mobile. As iPhonAsia’s Dan Butterfield reported earlier this week, China Unicom is offering an amnesty to users of gray-market iPhones.

“This amnesty program is designed to entice some 1.5 million grey-market iPhone owners in China to sign a contract and pop in a Unicom 3G sim card to take advantage of WCDMA 3G speeds and a variety of new ‘Wo’ 3G services,” Butterfield writes. “The ‘upgrade to 3G’ program is no doubt aimed squarely at the approximate 1,000,000+ iPhones now running on China Mobile’s EDGE 2G network.”

[Image credit: CCID]

Not the most aggressive price considering that Amazon (AMZN) is currently offering the Pre, the Pixi’s elder, more robust sibling, for $99 (see image below; click to enlarge) with a two-year contract as well. Remember, the Pixi has a slower processor and a smaller screen than the Pre. And it doesn’t support Wi-Fi. Has some neat back covers though!

Worse, Pixi requires $200 to get out the door, and statistically speaking, there will be quite a few people who will fail to cash in that second $100 rebate. As I noted back when the Pre launched with a similar rebate program, redemption rates for offers like these typically run around 58 percent, thanks to customers who either find the process too cumbersome or forget about it entirely.

This can end up being quite lucrative for the issuing company. Consider this: In 2004, TiVo (TIVO) promised customers a $100 mail-in rebate within six to eight weeks of the purchase of a new DVR. About 50,000 of the 104,000 eligible for that offer failed to take advantage of it. That saved TiVo about $5 million.

PREVIOUSLY:

• Palm Pre: $199 After a $100 Rebate We Hope You Lose

The new iMacs boast LED-backlit 21.5- and 27-inch widescreen displays in an edge-to-edge glass design and all aluminum enclosure. They’re available with Intel (INTC) Core 2 Duo processors starting at 3.06 GHz, and Core i5 and i7 quad-core processors for even better performance. The low-end model is priced at $1,199, the same as the past generation, but its high-end sibling is now $200 cheaper, at $1,999.

The new MacBook features an 13.3-inch LED backlit display, a multitouch trackpad, and a $999 price tag. Though still housed in white polycarbonate plastic, it features an updated unibody design borrowed from the MacBook Pro.

The successor to the Mighty Mouse, Magic Mouse, eliminates mechanical buttons, instead, employing the same multitouch surface found on the iPhone, iPod touch, and Mac notebook trackpads, allowing users to navigate their desktops with simple gesture commands.

Accompanying the Magic Mouse is a a new Apple Remote. It’s got a new design and is, predictably, housed in aluminum.

Finally, Apple (AAPL) also updated the Mac mini. While its design is largely identical to that of its predecessor, it offers far more storage. Starting at $599, the entry-level Mac mini features a faster 2.26 GHz Intel Core 2 Duo processor and 2GB of DDR3 1066 MHz memory, a 160GB hard drive, five USB 2.0 ports, FireWire 800, Nvidia GeForce 9400M integrated graphics and a SuperDrive.

There’s also a new $999 Mac mini that’s specially configured with a Mac OS X Snow Leopard Server. It’s outfitted with two 500GB hard drives for a total of 1TB of server storage.

Quite a refresh and one analysts are already crowing about. In a bulletin released after the announcement, Piper Jaffray’s Gene Munster said Apple’s new machines will undoubtedly improve the company’s prospects for the December quarter.

“We expect the new iMacs, and to a lesser degree the new Mac minis, to help the desktop category rebound in the Dec. quarter,” Munster wrote. “In other words, the headwind that existed in the Sept. quarter due to aging Mac desktops has now turned into a tailwind for Mac units in the Dec. quarter….Bottom Line: Street Mac numbers may also be conservative if positive trends continue coupled with new Macs in the quarter.”

Last year around this time, Sonos introduced its Controller for iPhone, a free application that essentially turns the device into a remote control for any Sonos system. The software performed nearly all of the tasks of the $399 Sonos remote and drastically lowered the price of entry for the otherwise spendy wireless system.

A year later, Sonos is building on the success of that app, launching an all-in-one wireless music system specifically designed for it. The ZonePlayer S5, as the company calls it, encapsulates Sonos’s multi-component system in a single device that can be controlled by an Apple (AAPL) iPhone, iPod touch or computer.

It’s a sort of iPodless iPod speaker dock or, rather, an iPod speaker dock where the iPod can be carried with you. The S5 can stream music from the iTunes library of any computer or networked hard drive. And with five speakers–two tweeters, two three-inch midrange drivers and one 3.5-inch woofer–and a 5 Class-D digital amplifier, the sound is likely to fill a room pretty well. Priced at $399, the S5 is expected at market on Oct. 27.

Yesterday, A group of House members from rural districts called on the Federal Communications Commission to investigate Google’s practice of blocking calls to numbers that use rural exchanges to charge inflated prices–something regulation prevents traditional telecom carriers from doing.

In their letter to the FCC, the lawmakers–among them Reps. Steve Buyer (R., Ind.), Charlie Melancon (D., La.), Michele Bachmann (R., Minn.) and John Barrow (D., Ga.)–claim that rural consumers will be harmed if Google is allowed to “evade compliance with important principles of access and competition.”

“We understand Google has asserted Google Voice is not a ‘traditional’ telephone service–despite its use of 10-digit telephone numbers and its ability to connect calls between telephones through a local exchange carrier,” the lawmakers wrote in the letter. “Instead, Google maintains it ought to be allowed to block calls to rural telephone exchanges–a position we find ill conceived and unfair to our rural constituents.”

This, of course, is pretty much what AT&T (T) said in September when it slagged Google (GOOG) as “one of the most noisome trumpeters of so-called net-neutrality” and asked the FCC to order it to “play by the same rules as its competitors.” Google, however, insists those rules don’t apply in its case.

“The FCC’s open Internet principles apply only to the behavior of broadband carriers–not the creators of Web-based software applications,” Google telecom counsel Richard Whitt wrote in response to AT&T’s complaint. “Even though the FCC does not have jurisdiction over how software applications function, AT&T apparently wants to use the regulatory process to undermine Web-based competition and innovation.”