According to the latest report from IDC, PC shipments are
expected to decline 10.1% to 314.2 million units in 2013. The
current annual projection deteriorated from the research firm's
earlier forecast of a 9.7% decline. The decline in global PC
shipments is largely due to a shift in consumer preference toward
tablets and mobile devices in both mature and emerging
What's worse, IDC traces the slump to softness in emerging
markets, which has for some time supported growth and is
considered to be the key growth driver. PC shipments in emerging
markets are expected to be down 11.3% to 182.1 million units in
2013, steeper than the 8.4% year-over-year decline in mature
markets. In May, IDC forecast a decline of 7.8% in emerging
China appears to be the main reason for the lowered forecast,
due to the continued shift in customer preference toward tablets
Despite the disappointing 2013 projections, IDC expects the
rate of decline to moderate in 2014, aided by system refreshes
and enterprise system migrations beyond Windows 7. PC shipments
are forecast to increase 0.4% in 2017, primarily due to growth in
emerging markets that will likely offset the lower PC shipments
in the mature markets. However, the lack of new and enhanced
applications could pose challenges.
Moreover, according to IDC, commercial PC shipments will hold
up better than consumer PCs this year. Consumer PC shipments are
likely to be down 15.0% on a year over basis, steeper than the
5.0% year-over-year decline in commercial markets. The lower rate
of decline in commercial markets could be attributed to
relatively steady PC investment planning because of the need to
upgrade from the Windows XP OS.
The top three global PC vendors - Lenovo,
) and Dell - have recorded a decrease in shipments. To
counter the current scenario, these PC vendors are initiating
plans to attract consumers with 2-in-1 devices, which incorporate
features of both tablets and notebooks. Moreover, chipmaker
) and software giant
) has also lent their support to the market for these
It is worth mentioning that the emergence and continued
adoption of handheld computing devices from
), Samsung and other Asian companies are cannibalizing PC sales.
According to IDC, in 2013, tablet shipments will increase 53.5%
on a year-over-year basis to 221.3 million units. Additionally,
IDC predicts that tablet shipments will grow 22.2% in 2014.
However, tablet shipments are expected to decline year over year
and by 2017 growth will slow down to a single-digit rate.
We believe that the ability to migrate to mobile platforms
and/or data centers may be the only possible solution for these
Currently, Hewlett-Packard, Microsoft, Apple and Intel all
carry a Zacks Rank #3 (Hold).
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