PC Shipments to Decline in 2013 (revised) - Analyst Blog
19 September 2013 - 10:04PM
Zacks
PC vendors are in for a tough time ahead as the latest IDC
report revealed that PC shipments are expected to decline 9.7% in
2013. The current annual projection worsened from the research
firm’s earlier forecasts of a 1.3% drop (projected in March) and a
7.8% decrease (forecasted in May) for 2013, primarily due to the
continued shift in consumer preferences toward mobile devices.
What’s worse, IDC traces the slump to softness in emerging
markets, which has for some time supported growth. PC shipments in
emerging markets are expected to be down 9.8% in 2013, steeper than
the 9.4% year-over-year decline in mature markets.
China appears to be the main reason for the lowered forecast,
due to continued shift in customer preferences toward tablets and
smartphones. IDC says that some inventory has accumulated in the
channel.
Despite these mundane and disappointing 2013 projections, IDC
expects the rate of decline to moderate and a slow rebound in PC
shipments after 2014 aided by system refreshes and businesses
opting for system migrations beyond Windows 7. However, the lack of
new and enhanced applications could pose challenges.
The PC market is already in the doldrums as the second-quarter
PC shipments were down 11.7% from the year-ago period. The top 3
global PC vendors – Lenovo, Hewlett-Packard (HPQ)
and Dell (DELL) – have not only recorded a
decrease in shipments but also contractions in market shares. On a
geographic basis, PC shipments were down across the U.S., the EMEA
and the Asia/Pacific.
We believe that the emergence and rapid adoption of handheld
computing devices from Apple (AAPL), Samsung and
other Asian companies are cannibalizing PC sales and this trend may
be expected to continue. This also raises a question about the
future of the PC industry and the prospects of companies relying
substantially on the sale of PC’s (H-P and Dell). Related markets,
such as security are also feeling the pinch.
We believe that the ability to migrate to mobile platforms
and/or data centers may be the only possible solution for these
players.
Currently, Hewlett-Packard, Dell, Apple and Symantec carry a
Zacks Rank #3 (Hold).
(We are republishing this article to correct an error. We
earlier had erroneously stated that Symantec
(SYMC) was exiting the PC market, which is inaccurate. The
original article, published Sept. 4, 2013, is no longer to be
relied upon.)
APPLE INC (AAPL): Free Stock Analysis Report
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HEWLETT PACKARD (HPQ): Free Stock Analysis Report
SYMANTEC CORP (SYMC): Free Stock Analysis Report
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