HPQ, LNVGY, MSFT: PC Sales Outlook Lowered By IDC

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PC makers like Hewlett-Packard Company (NYSE:HPQ), Lenovo Group Limited (ADR) (OTCMKTS:LNVGY) and Dell are likely to face the downside pressures of PC sales in the current year. Research organization, International Data Corporation, has slashed its global PC shipments forecast to witness a drop of 4.9% in 2015. This is wider than a fall of 3.3% predicted by it earlier.

Growth Projections

However, IDC has increased its growth estimations for the next two years, though modestly. Though the fourth quarter shipment indicated 1.7% more than the estimation, product and economic changes would create a headwind in the near-term. Therefore, the research firm is projecting 293.1 million units of PCs in the current year of 2015. This would further slip to 291.4 million units in 2019.

In terms of value, the PC market crossed the $200 billion mark again by reaching $201 billion in 2014 representing an 80 basis point fall. In the current year, this would drop further, by 6.9%, with a smaller fall expected in the following years. This would lead to $175 billion by the turn of 2019.

Fourth quarter shipment volume witnessed growth, partly due to inventory build-up of Windows 8.1 plus Bing systems. Also, Microsoft Corporation (NASDAQ:MSFT) was expected to scale back subsidies in early 2015. The research firm expects it to impact in the near term.

Emerging Markets

Portable PC holds the key in driving PC sales. In the emerging nations, portable PCs witnessed 83.2 million units shipment in 2014. IDC predicts it to fall to 79.1 million units in the current year and grow to 83.7 million units in 2019. However, desktop PCs would not likely to see any reversal of fortunes. The desktop PC witnessed 80.4 million shipments in 2014 and would drop to 76.8 million units in 2015 and to 75.2 million units in 2019. Overall, the PC market will fall to 159 million units in 2019, from 163.7 million units in 2014, in the emerging markets.

As far as the matured markets were concerned, total PC demand will drop to 132.5 million units in 2019, from 144.5 million units in 2014. Both desktop and portable PCs would see downside pressures during the period.

IDC PC Sales

PC Shipment Growth by Region and Product Category

Region Product Category

2014

2015*

2019*

Emerging Markets Desktop PC

-6.1%

-4.5%

-0.4%

Emerging Markets Portable PC

-13.5%

-4.9%

1.5%

Emerging Markets Total PC

-9.5%

-4.7%

0.6%

Mature Markets Desktop PC

4.6%

-8.8%

-2.1%

Mature Markets Portable PC

10.8%

-2.9%

-0.8%

Mature Markets Total PC

8.4%

-5.1%

-1.3%

Worldwide Desktop PC

-2.1%

-6.2%

-1.0%

Worldwide Portable PC

-2.3%

-3.9%

0.3%

Worldwide Total PC

-2.2%

-4.9%

-0.2%

Viraj Shah

Viraj Shah has completed M.Com (Finance) and is currently pursuing his CFP. He tracks US markets along with other global markets like India very closely. He is very passionate about stocks, real estate, and technology. He also believes that money can always be made in the market.

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