A Summit Research note released yesterday broke down IDC’s recent report on the state and future prospects of the PC sector. The short-term news is mainly gloomy — IDC has revised their projections downward, and is now calling for a 10.1% decrease in PC sales in 2013, versus their earlier call for a 9.7% decline. The longer-term outlook is brighter — IDC sees the sales slump ameliorating in 2014, and late 2016 or 2017 as the time frame to expect to see a return to growth in the PC sector.
Breaking down PC sales numbers
IDC reports consumers sales of PCs are projected to decrease by 15% year over year, while commercial PC sales are only expected to decline around 5% year over year. Desktop PCs are suffering the most precipitous sales decreases, given desktop units are expected to decline from 148 million units in 2012 to 120 a mere million units in 2017. Notebooks and laptops are projected to drop from 201 million units in 2012 to 184 million units in 2017. IDC projects total PC shipments will not return to the the 2008 level of 300 million units until at least 2017.
Charlie Munger: Invert And Use “Disconfirming Evidence”
Charlie Munger is considered to be one of the best investors and thinkers alive today. His thoughts and statements on investment research, investment psychology, and general rational behavior are often incredibly insightful. Anyone can learn something from this billionaire investor and philosopher. Q2 2020 hedge fund letters, conferences and more If you’re looking for value Read More
Improvements in commercial shipments
Commercial sales are clearly the bright spot in the PC sector. Summit expects 2014 commercial PC shipments to improve year over year, especially given that Microsoft Corporation (NASDAQ:MSFT) is finally ending its technical support for Windows XP in April 2014. Both Hewlett-Packard Company (NYSE:HPQ) and Dell Inc. (NASDAQ:DELL) are likely to benefit from this event, particularly given the fact that many large enterprises in the U.S. are required to buy their PCs domestically. That said, Summit expects Lenovo Group Limited (HKG:0992) to be an extremely tough competitor internationally, especially ex-Europe
Dell versus HP sales
Summit also projects that Hewlett-Packard Company (NYSE:HPQ) gained some market share in the U.S. in the commercial segment related to the uncertainty of Dell going private. Given Dell’s sales operations returning to full strength, Dell Inc. (NASDAQ:DELL) is likely to focus on its commercial segment, especially domestically, and could potentially regain some of that market share. Summit has produced some charts to illustrate how the major OEMs have gradually evolved from consumer to commercial.