Sales of tablets and smartphones will outnumber personal computers this year as consumers begin using a wider variety of devices to access the Internet, according to a study by the Deloitte consulting firm.
"Deloitte predicts that in 2011 more than 50 percent of computing devices sold globally will not be PCs," Deloitte said in its latest Technology, Media & Telecommunications Predictions report.
It said sales of smartphones and tablet computers would come to 425 million, well above sales of 390 million PCs.
Tablets are expected to rack up 50 million sales and smartphones 375 million.
Deloitte said the PC era is far from over as they will remain the workhorse computing platform.
"However, when looking at the future of computing devices, 2011 may well mark the tipping point as we move from a world of mostly standardised PC-like devices, containing standardised chips and software, to a far more heterogeneous environment."
It said it it expects at least two distinct chip architectures to emerge and at least five different operating systems with more than five percent market share. Deloitte said it also expects 2011 to be a breakthrough year for tablets in the workplace, with more than 25 percent of sales in 2011 going to companies.
Software to allow tablets to become integrated to secure business networks has recently become available.
Holiday-season sales of personal computers fell for the first time in more than five years, according to tech industry tracker IDC, as Microsoft's new Windows 8 operating system failed to excite buyers and many instead opted for tablet devices and smartphones.
The slump caps a miserable year for PC makers such as Hewlett-Packard Co, Lenovo Group and Dell Inc, which saw the first annual decline for more than a decade with no immediate signs of relief.
It underscores an unspectacular launch for the latest version of the Windows franchise, which Microsoft is banking on to fight off incursions into the PC arena by touch-friendly devices such as Apple Inc's iPad.
"The sense is that until Windows 8 is fully installed and prices start to come down, we will be in this state of negative dynamics in the PC market," said Aaron Rakers, an analyst at Stifel, Nicolaus & Co.
Still, analysts warn against counting out Windows 8 — the most radical change in the operating system in 20 years — as consumers grow more comfortable with its tile-based interface and touch features.
In the past, a new operating system from Microsoft tended to stimulate a spurt of PC sales, but PC makers simply did not get enough attractive machines into the market, said IDC.
"Lost in the shuffle to promote a touch-centric PC, vendors have not forcefully stressed other features that promote a more secure, reliable and efficient user experience," said Jay Chou, senior research analyst at IDC.
This year could be better, he suggested, even in the face of talk about the death of the PC as tablets are on track to outsell full-featured machines for the first time in the United States.
"As Windows 8 matures, and other corresponding variables such as ultrabook pricing continue to drop, hopefully the PC market can see a reset in both messaging and demand in 2013," said Chou.
PC makers sold 89.8 million units worldwide in the fourth quarter of last year, down 6.4 percent from the same quarter of 2011. That was slightly worse than expected by most, and the worst performance for more than five years, when the global economy shuddered to a halt and ushered in the worst recession since World War II.
For all of 2012, 352 million PCs were sold, down 3.2 percent from 2011. That was the first annual decline since 2001, according to IDC, in the wake of the tech stock crash and the September 11 attacks.
IDC is forecasting a meager 2.8 percent growth in PC sales for 2013.
"There's a lack of compelling reasons to upgrade," said Ashok Kumar, an analyst At Maxim Group, who said people are now waiting up to 10 years to replace computers rather than five in the past.
"Increases in performance have been smaller and there are fewer new applications that require more computing horsepower," he said. "In developing markets, the first purchase is not a PC, it's a smartphone, especially in markets where literacy levels are low."
No miracles at CES
The numbers are bad news for Microsoft, which still provides the underlying software for nine out of 10 PCs but is suffering as Apple's iPad and other tablets eat away at the cheap end of the PC market.
Touch-friendly Windows 8 and Microsoft's own Surface tablet were designed to counter that shift, but the radical new-look software has not gripped consumers' imaginations.
"Windows 8 wasn't going to be as big a catalyst," said Shaw Wu, analyst at Sterne Agee. "It's so different, it's almost uncomfortably different from past Windows, and there's a risk that Windows 8 ends up like Vista."
Windows Vista, released worldwide in 2007, was Microsoft's least popular operating system with users in recent years.
Microsoft pulled out of the Consumer Electronics Show in Las Vegas this year, vacating its usual sprawling display area, but PC makers such as Asustek, LG Electronics and Samsung Electronics filled the gap with a dizzying array of big screen computers, lightweight laptops, tablets and combinations of those, all running Windows 8.
Many of the new models attracted jostling crowds on the show floor, like Panasonic Corp's 20-inch ultra-high-definition tablet and Razer's dedicated Edge tablet for PC gamers.
But none was hailed a show-stopper that might single-handedly turn around the fortunes of Windows.
"No single device will spur sales, it will take time for consumers to learn that Windows 8 even exists. CES will do little to change that," said Sarah Rotman Epps, an analyst for tech research firm Forrester. "Windows 8 is going to be a slow ramp, regardless of hardware quality."
Microsoft says it feels good about the progress of Windows 8, as sales hit 60 million this week after 10 weeks on the market. That is in line with Windows 7 three years ago, and well ahead of Vista, which took 100 days to reach 40 million sales.
Tami Reller, chief financial officer of Microsoft's Windows unit, said sales of Windows 8 PCs may have been held back by shortages of the most popular touch-screen machines.
"The level of demand I think surprised a lot of people. And frankly, the supply was too short," said Reller at an analyst presentation at CES this week.
Hopes for Surface with Windows 8 Pro
Microsoft is looking to juice that demand further this month with its new Surface with Windows 8 Pro, a tablet running an Intel processor that is fully compatible with Office and traditional PC programs, unlike the first Surface it launched last year based on an ARM Holdings-designed chip.
Despite that bullishness, analysts have been edging down their earnings expectations for Microsoft lately.
"Win 8 is disappointing, the PC market will remain weak for awhile and margins are likely capped," said Morgan Stanley analyst Adam Holt on Thursday, as he downgraded the stock to 'equal-weight' from 'overweight'.
Investors are also nonplussed, driving Microsoft's shares down neraly 20 percent since last March, even as the Standard & Poor's 500 has marched upward to a five-year high this week. The shares are down 6 percent since the launch of Windows 8 on October 26.
Decline of PCs and shift to mobile hit Intel earnings
Intel continues to struggle with the transition from desktop to mobile computing. (Associated Press)
January 17, 2013
Each day seems to bring another development that emphasizes the staggering impact that the shift to mobile is having on traditional computing leaders.
Earlier this week, it was rumored that Dell, which has struggled to transform itself away from its dependence on PC sales, might go private.
On Thursday, it was Intel Corp.'s earnings report. While beating analyst expectations, the chip giant still saw revenue and profit fall as its core PC-related business suffered.
According Intel's press release: "PC Client Group had revenue of $34.3 billion, down 3 percent from 2011."
There seemed to be no evidence yet that the release last fall of Windows 8 from Microsoft, aimed at helping companies reinvent the desktop and laptop markets with more touch-screen features, had aided Intel. That may not bode well for Microsoft, which reports earnings next Thursday.
Intel on Thursday reported revenue of $53.3 billion, profit of $11 billion and earnings per share of $2.13 for 2012. Those are all down from the year before, when Intel reported $54 billion in revenue, $12.9 billion in profit and earnings per share of $2.39.
"The fourth quarter played out largely as expected as we continued to execute through a challenging environment," Intel Chief Executive Paul Otellini said a statement. "We made tremendous progress across the business in 2012 as we entered the market for smartphones and tablets, worked with our partners to reinvent the PC, and drove continued innovation and growth in the data center. As we enter 2013, our strong product pipeline has us well positioned to bring a new wave of Intel innovations across the spectrum of computing."
Perhaps. But the company projected revenue for the current quarter of $12.7 billion, which was below analysts' consensus estimates of $12.9 billion.
As a result, after rising 57 cents, or 2.6%, to $22.68 during the day, Intel's shares fell 86 cents, or 3.8%, to $21.82 in after-hours trading.
Better News for Verizon, AT&T. Plus, Intel's Risky Bet
As the smaller wireless companies busy themselves with dealmaking, Verizon and AT&T are scooping up the most lucrative customers. Also, Intel bets on hybrid PCs.
" ..... INTEL CEO PAUL OTELLINI is one of our favorite tech chieftains, and we'll miss him when he retires in May. Not only has he done a fine job steering the world's greatest chip maker, but he is one of the few tech leaders who can meld dry wit with technical arcana.
One example was Otellini's performance last Thursday, as Intel (INTC) reported fourth-quarter revenue that met expectations, but included a forecast for this year's sales growth that was a bit below what Wall Street had been predicting.
When asked by analysts why Intel is spending even more this year to outfit its factories for more-advanced chip production—an amazing $13 billion, up from $11 billion last year—even though the PC market outlook remains poor, Otellini's reply was sly.
"We're branch predicting," he said.
Come again? Branch prediction is technical jargon for when a computer chip tries to anticipate the next event in a computer program in order to plan how to use its circuitry efficiently.
In other words, Intel is betting that newfangled hybrid computers—a device that melds traditional PCs with tablets—will save the PC industry and rejuvenate Intel's microprocessor sales. It's a guess, albeit an educated guess. Think of a chess player pondering, "Will my opponent move rook or bishop?"
Needless to say, Wall Street does not like branch prediction, or any other form of uncertainty, especially when it costs $13 billion. Intel shares dropped 6% the next day, closing at $21.25.
Nor does the Street like branch predicting who will run Intel when Otellini moves on. Moreover—though he has done a fine job running Intel for several years—investors have decided that Otellini is in fact predicting the wrong branch. The stock price at this point reflects a belief these hybrid computers will largely fail, and people will instead continue to spend their disposable income on tablets and smartphones.
Otellini's prediction sounds more like a Field of Dreams or the old "Hail Mary" pass for a stock that's fallen more than 15% in the past year. We hope that Intel has predicted right and that the PC hybrids surprise and delight investors with their success.
But the evolution of tablets and smartphones, which make up another main branch on that tree, continues to grow and sprout new buds. That means there will likely be more bad news in coming months for the plain-old PC, even if Intel's bet at some point proves wise.
Intel's shares aren't pricey. Shares closed on Friday at $21.25, trading at less than 10 times forward earnings, after factoring in about $3.57 per share in cash and investments.
But further bad news on the PC front—or too much good news from the tablet and smartphone branch—could make Intel fall further before there's any reprieve.
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jeffolie: One might short a bull ETF to gain the decay but this requires a margin position subject to changes imposed by the exchanges & brokers
Oct 26, 2013 13:26:07 GMT -6
jeffolie: Holding a stop loss in these algo dominated markets almost always means the algos will hit your stops
Oct 26, 2013 13:20:09 GMT -6
jeffolie: Even so, these leveraged ETFs do not create margin calls nor expiration dates thus allowing one to hold indefinitely
Oct 26, 2013 13:17:52 GMT -6
jeffolie: Yes, the ETF features fading/leveraged decay because the futures and/or options used decay plus the administrative costs rise the decay, declining value ... I accept this as a cost and feature of all ETFs that purchase futures/options to maintain price
Oct 26, 2013 13:15:38 GMT -6
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Oct 25, 2013 20:46:26 GMT -6