Citi sees more gloom in PC market

pc-sales-slumpIt’s no secret that things are bad in all facets of the PC market and Citi Research believes things are about to get even worse. In a note to investors sent late Friday, the outfit revised its previous forecasts downward. It originally expected the PC market to contract 4 percent this year, but now it expects a 10-percent slide.

The dire predictions indicate that Windows 8.1 and Haswell won’t have much of an effect on overall shipments. It cited sub-seasonal demand in the first quarter and a slowdown in notebook production as contributing factors. Citi also noted that the benefits from Haswell and Windows Blue will be muted and that PC-end demand will remain soft. Computex didn’t help and emerging market aren’t coming to the rescue, either.

“We do not see any meaningful catalysts near-term supported by our product and company meetings at Computex in Taiwan last week which revealed a focus on convertible & higher-end Ultrabooks running Haswell, which addresses the smaller premium notebook market,” Citi said. “We also believe investors will be disappointed when they learn that low-priced touch-capable notebooks (sub-$600) will not be available to consumers until 4Q13.”

Citi forecasts notebook shipments of 179 million units this year, down from 201 million in 2012. Desktops are down as well, 137 million units vs. 148 million units last year. Meanwhile tablet shipments are expected to hit 237 million units, up from 144 million in 2012, reports CNET.

It gets worse. Citi says it previously modelled +2 percent growth year-on-year in PC shipments in 2014 and 2015. That figure has gone out the window.

“We now expect cannibalization from tablets…to more than offset any ‘stabilization’ in demand resulting from stretched replacement cycles or more compelling notebooks,” Citi said.

Compelling seems to be the key word in the PC industry, nowadays. There are no compelling new products or form factors, no compelling OS upgrade or compelling new features. PCs are becoming so mature that they are starting to resemble household appliances, with no apparent need to upgrade until they die.