Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
S&P 500 – Is a 5% Correction Enough? - 6th Dec 21
Global Stock Markets It’s Do-Or-Die Time - 6th Dec 21
Hawks Triumph, Doves Lose, Gold Bulls Cry! - 6th Dec 21
How Stock Investors Can Cash in on President Biden’s new Climate Plan - 6th Dec 21
The Lithium Tech That Could Send The EV Boom Into Overdrive - 6th Dec 21
How Stagflation Effects Stocks - 5th Dec 21
Bitcoin FLASH CRASH! Cryptos Blood Bath as Exchanges Run Stops, An Early Christmas Present for Some? - 5th Dec 21
TESCO Pre Omicron Panic Christmas Decorations Festive Shop 2021 - 5th Dec 21
Dow Stock Market Trend Forecast Into Mid 2022 - 4th Dec 21
INVESTING LESSON - Give your Portfolio Some Breathing Space - 4th Dec 21
Don’t Get Yourself Into a Bull Trap With Gold - 4th Dec 21
GOLD HAS LOTS OF POTENTIAL DOWNSIDE - 4th Dec 21
4 Tips To Help You Take Better Care Of Your Personal Finances- 4th Dec 21
What Is A Golden Cross Pattern In Trading? - 4th Dec 21
Bitcoin Price TRIGGER for Accumulating Into Alt Coins for 2022 Price Explosion - Part 2 - 3rd Dec 21
Stock Market Major Turning Point Taking Place - 3rd Dec 21
The Masters of the Universe and Gold - 3rd Dec 21
This simple Stock Market mindset shift could help you make millions - 3rd Dec 21
Will the Glasgow Summit (COP26) Affect Energy Prices? - 3rd Dec 21
Peloton 35% CRASH a Lesson of What Happens When One Over Pays for a Loss Making Growth Stock - 1st Dec 21
Stock Market Sentiment Speaks: I Fear For Retirees For The Next 20 Years - 1st Dec 21 t
Will the Anointed Finanical Experts Get It Wrong Again? - 1st Dec 21
Main Differences Between the UK and Canadian Gaming Markets - 1st Dec 21
Bitcoin Price TRIGGER for Accumulating Into Alt Coins for 2022 Price Explosion - 30th Nov 21
Omicron Covid Wave 4 Impact on Financial Markets - 30th Nov 21
Can You Hear It? That’s the Crowd Booing Gold’s Downturn - 30th Nov 21
Economic and Market Impacts of Omicron Strain Covid 4th Wave - 30th Nov 21
Stock Market Historical Trends Suggest A Strengthening Bullish Trend In December - 30th Nov 21
Crypto Market Analysis: What Trading Will Look Like in 2022 for Novice and Veteran Traders? - 30th Nov 21
Best Stocks for Investing to Profit form the Metaverse and Get Rich - 29th Nov 21
Should You Invest In Real Estate In 2021? - 29th Nov 21
Silver Long-term Trend Analysis - 28th Nov 21
Silver Mining Stocks Fundamentals - 28th Nov 21
Crude Oil Didn’t Like Thanksgiving Turkey This Year - 28th Nov 21
Sheffield First Snow Winter 2021 - Snowballs and Snowmen Fun - 28th Nov 21
Stock Market Investing LESSON - Buying Value - 27th Nov 21
Corsair MP600 NVME M.2 SSD 66% Performance Loss After 6 Months of Use - Benchmark Tests - 27th Nov 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

How This IBM Will Outlast the PC’s Extinction

Companies / Tech Stocks Jan 27, 2014 - 12:33 PM GMT

By: DailyGainsLetter

Companies

John Paul Whitefoot writes: The first raft of first-quarter earnings reports are in…and they’re not a total surprise. Against the backdrop of a weak U.S. economy and waning consumer confidence, some big go-to stocks are beginning to show signs of distress—few more (right now) than makers of personal computers (PC makers).


Two research companies tracking PC makers delivered their reports for the just-completed fourth quarter—they’re not encouraging. Gartner pegged fourth-quarter PC shipments at 82.6 million, a 6.9% year-over-year decrease. For all of 2013, it said sales fell 10%—capping off the worst decline in PC market history. (Source: Hardy, Q., “For PC Makers, the Good News on 2013 Is That It Is Over,” The New York Times web site, January 9, 2014.)

Numbers from International Data Corporation (IDC) were slightly better (or less bad). It said PC shipments fell 5.6% year-over-year to 82.2 million units. For all of 2013, IDC reported that 314.5 million PCs were shipped—which reaffirms Gartner’s reported 10% drop from 2012. (Source: Ibid.)

But that’s where the similarities ended. When it came to the future of PC makers, Gartner said the PC market could improve in 2014; meanwhile, IDC said there was no reason to believe the market would stabilize. Why? Because PCs are giving way to mobile devices, such as tablets and smartphones.

Going forward, PC makers will have to ask themselves if younger, on-the-go consumers, who use their mobile devices as a first computer, will ever want to invest in a fixed device like a PC.

IDC also said sales of PCs fell to 108 million units in the Asia Pacific (outside Japan) region—marking the first annual double-digit decline for this area. The decline in PC sales was the worst for PC makers in Taiwan, where fourth-quarter sales for Acer Inc. tanked by 28.6%. In a move that would shake up the overpaid underachiever on Wall Street, the Taiwanese PC maker said its executives will take a 30% pay cut. (Source: Gold, M., “Acer fourth-quarter loss leads to 30 percent executive pay cut,” Reuters, January 17, 2014.)

With more and more people turning to mobile devices to access and share information, it doesn’t look like 2014 is going to be a banner year for PC makers.

What about one-time PC makers? While International Business Machines Corporation (NYSE/IBM) reported weak fourth-quarter results, their future looks brighter than most PC makers.

IBM recently announced that revenue fell five percent to $27.7 billion in the fourth quarter—its seventh straight decline in quarterly revenue and fourth straight quarter that the company’s revenue fell short of analysts’ targets. Hardware revenue tanked 26% to $4.26 billion, services revenue fell 3.6% to $9.92 billion, and software revenue increased 2.8% to $8.14 billion. On a brighter note, the company said earnings increased six percent year-over-year to $6.19 billion, or $5.73 per share. (Source: “IBM Reports 2013 Fourth-Quarter and Full-Year Results,” International Business Machines Corporation web site, January 21, 2014.)

But not all is lost for this now former PC maker. The company has extracted itself from the slumping PC industry, so it is not limited by the same technological parameters as such PC makers as Lenovo Group Limited, Hewlett-Packard Company (NYSE/HPQ), or Dell Inc. (NASDAQ/DELL).

If anything, IBM has transitioned into a software company—and over the next few years, software will play an even more important role in the company’s growth. A product offering that has been kind to companies like Microsoft Corporation (NASDAQ/MSFT) and Oracle Corporation (NYSE/ORCL).

This article How This Tech Stock Will Outlast the PC’s Extinction was originally published at Daily Gains Letter

© 2014 Copyright Daily Gains Letter - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in