Citi Losing Confidence in PC Markets
- Updated: June 10, 2013
In a research note on Monday, Citigroup (NYSE: C) said that it’s “Hard to see PC sales growing.” In the note, it wrote:
“Citi’s technology team cuts its 2013 PC growth estimate to -10% y- o-y from -4% and now sees sales falling in 2014-2015, compared to prior expectations for slight growth in that period. The rapid increase in tablet sales is expected to outweigh any push PC makers will see from a stretched replacement cycle, Citi says as it reiterates sell ratings on Hewlett-Packard (NYSE: HPQ) and Lenovo (OTC: LNVGY). Even in emerging markets, which drove PC growth over the last decade, Citi expects “tablet cannibalization to become a more severe headwind.”
This is more bad news for a market that can’t get out of its own way when it comes to falling sales. The latest metrics show PC shipments declined more than 14 percent as tablets and other mobile devices take market share. Some speculate that DELL (NASDAQ: DELL) is going private to quietly change its model from PC sales to enterprise sales and service as that appears to be the PC’s only hope.
Microsoft (NASDAQ: MSFT) did little to revive the PC market with Windows 8. The company will soon roll out Windows 8.1 but even if concedes that its enterprise market may be more lucrative going forward than consumer PCs.
Disclosure: At the time of this writing, Tim Parker had no position in any of the equities mentioned.
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