Global shipments of personal computers are set to decline by 4.9% from an initial guidance of a 3.3% drop as the effects of a strong dollar continue to bite, and lack of new products threaten sales. It will be interesting to see how some of the stocks in the industry will react to the news as CNBC’s Josh Lipton, reports that Intel Corporation (NASDAQ:INTC) has already been forced to slash its first quarter guidance by the uncertainty in the space.
IDC’s researchers note that a strong dollar will continue to crimp PC exports. A problem that should be compounded by the fact that many PC sellers bought more computers in the fourth quarter to boost inventory, before Microsoft started to scale back on subsidies early in the year. Competition from phones, tablets, and wearable’s is expected to continue posing an ongoing challenge to PC spending.
“We’ve been talking all day here off course about Intel which cut its first quarter revenue allocation, in part that was due to this weaker than expected demand for commercial PC. [..] Analysts at IDC forecasting that PC shipments will fall by 4.9% this year, and that is a drop from the previous forecast of about 3.3%. Total 2015 volume now projected at 293 million PC’s it will be interesting to see how some names react here,” said Mr. Lipton.
Intel Corporation (NASDAQ:INTC) , a key manufacturer of chips used in PC’s, is especially being hit hard by a shift to mobile devices in emerging markets where shipments are expected to drop by 4.7% this year. Consumers in the markets are opting to go for smartphones at the expense of PC’s consequently affecting demand.
Intel Corporation (NASDAQ:INTC) problems in the PC market have further been compounded by small and medium size business shying off from buying new PC In anticipation of upgrading from Microsoft Corporation (NASDAQ:MSFT)’s outdated Windows XP Operating system. The tablet market, which was seen as a probable frontier for growth has also started to slow, consequently suppressing the chipmaker’s business.
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