This article will probably cost Intel another dollar per share tomorrow. : (. Is Intel a dead man walking? I thought Ultrabook convertibles were going to change things for the better.
Pads, tablets eating into PC market: Barclays
November 13, 2012, 12:04 PM
Barclays Capital sees more tough times ahead for personal computers. And it’s not just about a weak economy and the reluctance of consumers to spend.
In fact, consumers are willing to buy new computing devices, but they’re staying away from PCs, analyst Ben Reitzes said in a note.
Barclays now expects PC sales to fall 3% this year, down from an earlier projection of flat growth. Next year, PC shipments are seen slipping 4% year-over-year, worse that an earlier projection for a 1% decline.
“The consumer market remains weak and the tablet and smartphone markets continue to cannibalize the PC market; the iPad mini, new iPad and the iPhone 5 could continue to take wallet share,” Reitzes wrote.
Reitzes argues that “a new generation of consumers and IT workers are figuring out how to compute differently than those that started using PC’s in the 90’s — relying more on mobile devices and the cloud — as PC’s see significant ‘task infringement’ by the day.”
That means that it’s highly unlikely that the PC market “can remain in the range of 350 million units a year.” Instead, with consumers hanging onto their PCs longer, that could mean “the loss of 50-100 million units in annualized demand by 2015.”
There’s another big problem: the industry isn’t preparing for this big change, Reitzes argued.
“After years of denial, most PC industry players still don’t seem to realize what is happening – and don’t have contingency plans,” Reitzes said. “PC’s are not the only subsector impacted in tech — as printing also is caught in the wake of mobility. Given these factors we are significantly cutting estimates for the PC industry to reflect further deterioration in PC related revenues.”
The big guns of the PC industry saw their shares in the red on Tuesday. Microsoft MSFT +0.63% shed 3% mainly on the departure of Steven Sinofsky, the head of its Windows division. Shares Hewlett-Packard HPQ +0.38% , Dell Inc. DELL +0.21% and Intel Corp. INTC +0.59% were also each down fractionally.
I'm not disagreeing with what the words of the analysis say, but I challenge the author to wake up and realize that the PC manufacturers have plans: they all entered the ultrabook and tablet market.
Now, to assume that everyone will stick to their smartphone to do all the net and computing needs, that is plain stupid.
A meaningless report. How do they define "PC"? How do they define "tablet"? The lines are blurring. The important point for an Intel investor is that Intel chips will be in a vast majority of the total units sold in 2015, be it PC or tablet.
Priced in, priced in, priced in, priced in, priced in, priced in, priced in, priced in, priced in, and priced in.
Priced in ten times and yet none of this has yet shown up as a reduction in revenues beyond what Intel initially indicated. Where's the miss from last quarter, Chump Street? It's an easy question. Where's the great big huge honking miss that you hyped like the second coming?
Sentiment: Strong Buy
The two slowest sectors are the ones which have fallen the farthest from grace. Computer IC sales will drop to 34% of the total market in 2012 vs. nearly 42% in 2011. This year's -9% drop in computer IC sales is due to a -12% decline in memory sales.
IC insight projected a 3.1% CAGR (2011-2016) for computer IC sales (see Solid State Technology 10/26/2012)