| PC Shipments to Fall Again in '15 as Vendors See Headwinds - Analyst Blog | |
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There seems to be no relief for PC manufactures as the latest report form IDC reveals that total PC shipments are again going downhill. According to IDC’s 2015 report, PC shipments are expected to contract 4.9%, worse than the research firm’s earlier forecast of a decline of 3.3%. The decline in global PC shipments is largely due to lower-than-expected demand for desktop and portable PCs.
What’s worse, IDC now expects global PC shipments to be 293.1 million units in 2015 with further declines in the long run (until 2019). In dollar terms, the PC market touched $201 billion in 2014, a fall of 0.8% year over year according to the research firm and is now anticipated to decline an additional 6.9% in 2015, finally dropping to $175 billion by 2019.
Although IDC had earlier stated that PC shipments stabilized in the fourth quarter of 2014, largely as a result of increased spending in mature markets and Microsoft’s MSFT Windows 8.1 with its Bing system, it now poses challenges primarily due to macroeconomic weakness and political turmoil.
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. IDC anticipates sales in emerging markets to decline 4.7% in 2015.
However, mature markets continue to fare better, with optimistic improvement of 8.4% in 2015. The increase is expected to come from system refreshes and enterprise system migrations beyond the Microsoft XP operating system. The reduction in PC prices by vendors is turning out to be a positive factor.
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.
It is worth mentioning that the pessimism expressed by the research firms has been reflected in the results and outlook provided by companies like Hewlett-Packard HPQ and Intel INTC. These leading players have a direct bearing with the PC industry. Besides, companies in allied industries such as IT security service provider Symantec Corp. SYMC have also not performed up to the mark.
Last week Intel Corp. INTC lowered its revenue guidance for the first quarter of 2015. The chip maker expects first-quarter net sales to be $12.8 billion (+/- $300 million), down from $13.7 billion (+/-$500 million).
Management lowered the guidance on account of slower-than-expected demand for PCs used by businesses. Moreover, most of the PC component suppliers have been reducing their inventories, indicating that the PC market is unlikely to witness any significant turnaround in the near term. The challenging macroeconomic environment and weak currency conditions, particularly in Europe, also remain a matter of concern for management.
HPQ reported revenues of $26.8 billion, which decreased 4.7% year over year and lagged the Zacks Consensus Estimate of $27.4 billion. The downside was primarily due to unfavorable foreign currency exchange rates. Notably, the company generates approximately 65% of revenues from outside the U.S. Also, desktop revenues decreased 10% from the year-ago quarter, while units sold declined 7% on a year-over-year basis.
Symantec also lowered its fiscal 2015 revenue guidance to a range of $6.515 to $6.575 billion from $6.715 to $6.795 billion. We believe that if the forecast provided by the research firm is accurate, it will badly hurt the business prospects of these companies as they rely substantially on the sale of PCs.
To sum up, the current phase of system upgrades and PC refresh cycles remain the near-term drivers for the industry. From a long-term perspective, PCs have to slog it out with other computing devices currently available, as returning to growth still remains a distant possibility.
Currently, Hewlett-Packard, Intel and Symantec carry a Zacks Rank #3 (Hold). Microsoft, on the other hand, carries a Zacks Rank #4 (Sell). Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report SYMANTEC CORP (SYMC): Free Stock Analysis Report INTEL CORP (INTC): Free Stock Analysis Report HEWLETT PACKARD (HPQ): Free Stock Analysis Report MICROSOFT CORP (MSFT): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research
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SYMANTEC est une société d’exploration minière basée aux Etats-Unis D'Amerique. SYMANTEC est cotée aux Etats-Unis D'Amerique. Sa capitalisation boursière aujourd'hui est 14,7 milliards US$ (13,2 milliards €). La valeur de son action a atteint son plus bas niveau récent le 09 octobre 1992 à 0,75 US$, et son plus haut niveau récent le 04 novembre 2019 à 23,75 US$. SYMANTEC possède 618 830 016 actions en circulation. |