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The Zacks Analyst Blog Highlights: Microsoft, Hewlett-Packard, Apple and Intel - Press Releases

For Immediate Release

Chicago, IL - April 15, 2015 - Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the Microsoft ( MSFT - Free Report ), Hewlett-Packard Company ( HPQ - Free Report ), Apple ( AAPL - Free Report ) and Intel Corp. ( INTC - Free Report ).

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free .

Here are highlights from Tuesday's Analyst Blog:

No Respite for PC Industry, Q1 Shipments Fall Again

The latest reports form Gartner and IDC reveal that total PC shipments further declined in the first quarter of 2015, reflecting that smartphones are replacing older PCs. It seems that PC manufactures will have no break as global shipments are again going downhill. The future of PCs also remains gloomy with per this recently revealed report.

Industry research firm, IDC, is of the opinion that the PC industry is going through the most difficult time as sales declined 6.7% on a year over year basis to 68.5 million units in the first quarter of 2015. The decline in global PC shipments is largely due to lower-than-expected demand for desktop and portable PCs. Also, a shift in consumer preference toward tablets and mobile devices in emerging markets was another major reason for the decline.

As per data provided by Gartner, PC shipments contracted 5.2% on a year over year basis to 71.7 million units in the first quarter of 2015. One major cause for the decline was businesses opting for lesser number of desktop computers, according to the research firm.

After a decent projection by the research firms in the second half of 2014, helped by increased spending in mature markets as a result of system refreshes and enterprise system migrations beyond Microsoft's ( MSFT - Free Report ) XP operating system, the first quarter was marked by several headwinds.

Microsoft's Windows 8.1 with its Bing system, now poses challenges primarily due to macroeconomic weakness and political turmoil. Also, a slowdown in XP refreshes and lower-than--expected demand in many regions were other important factors leading to sluggish PC sales.

Another major reason for the decline in PC sales is related to the cost of devices. In the emerging markets, consumers are opting for relatively inexpensive mobile computing devices such as tablets at the entry level. On the whole, we believe that there will be no relief for the next few years, as older PCs are getting replaced by thin and light notebooks with tablet functionality.

Nonetheless, IDC stated that the PC market in developed markets such as the U.S. appeared to be stabilizing in the first quarter, with tablet cannibalization tapering off. IDC also expects that the rollout of Windows 10, which features the newest version of the operating system, will turn out to be a positive for PC vendors. This in turn will slow the shift toward touch-based devices and moderate the decline in PCs.

PC makers such as Hewlett-Packard Company ( HPQ - Free Report ) and Dell Inc. have incurred heavy losses. This decline resulted in Hewlett-Packard losing ground to Lenovo in the first quarter.

Additionally, as per data provided by IDC and Gartner, Lenovo, with a 19.6% share of shipments in the first quarter of 2015, remained the market leader ahead of H-P. Lenovo posted a 3.4% year-over-year increase in PC shipments.

Hewlett-Packard remained in the second spot with a 19% share of shipments, up 3.3% on a year over year basis.

Dell secured the third place, with a shipment share of 13.5%, up from 13.4% a year earlier.

Acer occupied the fourth place with a 7.1% share of shipments flat on a year over year basis.

IDC's data more or less matches with Gartner, but is not exactly the same.

As far as market share is concerned, Hewlett-Packard secured the top spot in the U.S. with a 28.2% share, followed by Dell with 23.5% share. Lenovo came in third, with an 11.8% share, down from 10.7% in the year-ago quarter. Apple ( AAPL - Free Report ) held the fourth position with strong U.S. shipments and a 10.9% share of the market.

The slowdown has negatively impacted companies that rely substantially on the sale of PCs. Intel Corp. ( INTC - Free Report ), which makes microprocessors used in most PCs, lowered its revenue forecast last month. The lowered outlook was on account of slower-than-expected demand for business PCs and lower inventory levels across the PC supply chain.

To sum up, the current phase of system upgrades and PC refresh cycles remain the near-term drivers for the industry. From a long-term perspective, PCs have to slug it out with other computing devices currently available, as returning to growth still remains a distant possibility.

Currently, Apple holds a Zacks Rank #2 (Buy). Microsoft carries a Zacks Rank #3 (Hold). Intel and Hewlett-Packard on the other hand carry a Zacks Rank #4 (Sell) and a Zacks Rank #5 (Strong Sell), respectively.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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