NEW YORK (CNN/Money) - It's been called the most wonderful time of the year, but PC makers may want to keep an ample supply of extra-strength eggnog at the ready, because this holiday season is going to be rough.

An already weak economy, a stale product, and an almost total lack of interest on the part of PC retailers are conspiring to make this holiday shopping season a near washout.

And if that wasn't bad enough, pricing pressure is keeping average selling prices down, further squeezing the already microscopic margins that computer makers eke out on PC sales.

"We do not see any meaningful improvement in IT spending, and we are not counting on a strong holiday buying season," said Hewlett Packard (HPQ: Research, Estimates) CEO Carly Fiorina in her quarterly analyst call on Wednesday.

Bah humbug, indeed.

Typically, in the four weeks following "Black Friday," the day after Thanksgiving that kicks off the holiday retail season, PC makers have enjoyed a quarterly boost in sales ranging between 15 and 20 percent. But this year analysts are anticipating "muted seasonality." In layman's terms, that means soft sales. In fact, Bear Sterns expects worldwide PC revenue to be up an anemic 5 percent in the fourth quarter of 2002, over the third quarter. And shipments are only expected to increase by 7 percent.

"We are very concerned about the prospects of retail sales this season," says Andy Neff, analyst at Bear Sterns. "It's only a week away and still there is no visibility."

There are many reasons for the troubled times ahead. But the one shortcoming that the experts repeatedly point to is the absence of any compelling reason to buy a new PC, known as "catalysts" in analyst-speak.

Last year at this time, Microsoft (MSFT: Research, Estimates) was riding herd on its brand new operating system, Windows XP, and no one could turn on the television without seeing The Blue Man Group pitching Intel's (INTC: Research, Estimates) Pentium 4 processors. But this year the airwaves are eerily silent.

In concert with the lack of marketing from the PC stalwarts, the big electronics retailers have chosen to push televisions sets over PCs this season, indicating a lack of confidence in PCs this year. "I tell my investors, all you have to do is look at the Sunday newspaper," explains Walter Winnitzki, analyst at First Albany. "This year you see big screen TVs on the cover of the Circuit City circulars, but what you don't see is PCs. That tells you where the retailers are placing their bets."

But Circuit City officials say the jury is still out. "This is a time of year when people are looking forward to the Superbowl, and college basketball, and big-screen TVs are great for that," explained Bill Cimino, a Circuit City spokesperson. "And who's to say that PCs won't appear on the cover? I can't give away my competitive information."

One good way to combat sluggish demand is by slashing prices. HP kicked off the holiday reductions in October by slicing 10 percent off PC prices. Dell (DELL: Research, Estimates) followed suit immediately. "We've already seen these guys take one pricing action, and it wasn't even November yet," says Shebly Seyrafi, analyst at A.G. Edwards.

Indeed the average selling prices (ASPs) of personal computers has been on the decline of late. Since last year, the worldwide average price of computers has dropped 11 percent, from $1,426 to $1,267, according to IDC, a market research firm. And prices are expected to continue to decline right through the holiday season, according to Bear Sterns. Wal-Mart is offering discount PCs online right now for less than $200. HP is advertising refurbished PCs for $319. That's less than some of the company's handhelds.

The electronics retailers aren't the only ones shunning PCs either. The trend for PC makers this year has been to move away from their own core product, as one after the next emphasizes new consumer electronics products over their PCs. Apple (AAPL: Research, Estimates) with its iPod MP3 player, Dell selling printers and handhelds, and Gateway (GTW: Research, Estimates) entering the plasma TV business are all signs that the PC companies of yore are becoming a different animal entirely.

One reason for the shift, besides the global slowdown in PC sales, is the ever-eroding margins on PC sales. For most manufacturers, PC margins have hovered around 2 percent for years, and many computer companies have been taking losses on their PC businesses. But even Dell, which has defied gravity for years by turning in margins of around 7 percent on its PC business, is feeling the pinch. Dell's operating margin in home PCs fell to 4.8 percent this October, down from 7 percent a year ago, according to Seyrafi.

Even so, if an investor were to be so foolish as to place a bet on a PC maker, it would have to be Dell. In a down market, where sales are shrinking and margins are hard to come by, the only way to increase profits is by gaining share, and that's exactly what Dell has been doing. "HP has the scale, but Dell's share is moving up, and HP is moving down," says Seyrafi.

Dell officials have also said that despite the doom and gloom this season, they are going to do just fine. "What we are seeing is a little bit different than the rest of the market," said Jennifer Jones, a Dell spokesperson. "We are looking to buck the trend." The company has said it expects a robust holiday season, with unit shipments projected to rise about 10 percent sequentially, with revenues increasing almost 20 percent year-over-year. (A previous version of this story incorrectly stated that Dell expects to see a 10-percent increase in PC unit sales.) Dell, which does not rely on retailers to push its products, is planning a major marketing push to begin on November 26th.

HP did not respond to calls seeking comment.

Ultimately, the success of a holiday retail season depends on the consumer, and with folks holding on to their wallets for dear life, it's not going to be pretty for anyone this year. But for PC makers, the outlook is decidedly worse. Apparently, it's not such a wonderful life for the PC industry.