What Happened
Worldwide PC shipments plunged 19.5 percent year-over-year in the third quarter, preliminary results released by market research firm Gartner showed. This marked the steepest decline since the firm began tracking the PC market in the mid-1990s and was the fourth consecutive quarter of year-over-year drop, it said.“This quarter’s results could mark a historic slowdown for the PC market,” Mikako Kitagawa, director analyst at Gartner, said. The weakness seen in the third quarter was largely due to high inventory, given the weak PC demand in both the consumer and business markets, he said, adding that supply chain constraints have eased.
The analyst also noted that back-to-school sales were disappointing despite massive promotions and price drops, as many consumers had purchased new PCs in the last two years. Businesses also reduced spending due to geopolitical and economic uncertainties that made IT spending more selective.
Apple, Dell Grow Share
Dell Technologies Inc. and Apple Inc. were the only vendors among the majors that gained market share relative to the year-ago quarter. All vendors experienced year-over-year declines, with HP Inc., Lenovo Group Limited, and Acer seeing shipments falling by over 20 percent each.Benzinga’s Take
Apple held up relatively better than others in terms of unit shipments. KeyBanc Capital Markets analyst Brandon Nispel said in a recent note Cupertino could be a beneficiary of higher average selling price due to the mix shift in iPhone sales. The relative hit to Apple could be more modest, given expectations of fairly solid volume and higher ASP.AMD recently lowered its third-quarter revenue guidance by about 16 percent but reiterated strong performances by its Datacenter and Embedded business. With the bad news now in the rearview and the stock already reflecting the setback, a further sharp downside in shares is unlikely, unless there are issues with AMD’s other business segments.
Intel Corporation, which is on a turnaround following execution issues, could see its fundamentals suffer, according to KeyBanc. Analyst John Vinh said the weakening PC demand and softer data center demand in enterprise/China were to some extent reflected in the chipmaker’s prior guidance. The situation has worsened significantly from when Intel reported last, he added.
