According to the latest IDC report, the decline in PC shipments
is expected to moderate, helped by increased spending in mature
markets as a result of system refreshes and enterprise system
migrations beyond Microsoft's (
) XP operating system. Also, the demand for Chromebooks is on the
rise in these markets which is expected to cushion the decline in
PCs. Nonetheless, PC shipments in the emerging markets continue to
be impacted by consumers' preference for tablets and mobile
Buoyed by a forecasted 5.6% growth in PC shipments (140.7
million) in the mature markets, IDC now expects global PC shipments
(303.5 million) to decline 3.7% in 2014, a marked improvement from
its earlier forecast of a 6% decline. PC shipments in emerging
markets (162.7 million) are however expected to be down 10.5% in
IDC has also stated that PC market cannibalization by tablets is
weakening. The reduction of PC prices by vendors is turning out to
be an offsetting factor.
Additionally, IDC expects PC shipment declines to moderate
further to just 2.3% in 2015 backed by the extension of PC
replacement cycles and the scheduled launch of Windows 9.
It is worth noting that the optimism expressed by IDC was
reflected in some of the results declared by the companies such as
), Intel (
) and Microsoft that are directly related to the PC industry. Apart
from this, companies in allied industries, such as IT security
service provider Symantec Corp. (
), have seen an improvement in the market.
H-P reported top-line growth in the third quarter after 11
consecutive quarterly declines. Revenues improved primarily due to
higher sales in the PC segment.
Also, the company witnessed growth in commercial revenues driven
by strong demand for commercial desktops and notebooks. The ongoing
upgrade of H-P's installed base and the expiration of the Windows
XP operating system also aided segmental revenues. The consumer
segment was aided by higher sales in its Americas and EMEA regions,
which offset the soft demand in Russia and China.
Intel also reported higher unit volumes, both sequentially and
year over year, driven by the improving economic environment, PC
refreshes in the enterprise and SMB segments, Windows XP
end-of-life and the growing number of form factors that Intel
currently caters to. This, in turn, aided the company's top-line
Coming to Microsoft, Windows OEM revenues grew at a much slower
rate of 3% as the 11% OEM Pro revenue growth was largely offset by
a 9% decline in OEM non-Pro. Both OEM Pro and consumer licensing
benefited from the withdrawal of XP support.
The current phase of system upgrades and PC refresh cycles
remains the near-term catalysts for the industry. From a long-term
perspective, PCs have to slog it out with other computing devices
currently available, as returning to growth remains a distant
Want the latest recommendations from Zacks Investment Research?
Today, you can download 7 Best Stocks for the Next 30 Days.
Click to get this free report
MICROSOFT CORP (MSFT): Free Stock Analysis
SYMANTEC CORP (SYMC): Free Stock Analysis
INTEL CORP (INTC): Free Stock Analysis Report
HEWLETT PACKARD (HPQ): Free Stock Analysis
To read this article on Zacks.com click here.