PC Growth Rates to Drop to -10 Percent in 2013

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PC MarketWe’ve heard this story before; the personal computing market is eroding thanks to the exponential growth and adaptation of smartphones and tablets. Well according to a recent report from Citi Research, the dismal picture that has been painted just may not be dark enough.

On Sunday, Citi Research revised its initial forecast listing even lower PC growth rates in light of new market data. Citi dropped its projected growth rate down to -10 percent from its earlier listing at -4 percent. The company claimed that the change was based on sub-seasonal demand in the first quarter in addition to slowing notebook production.

Citi also appeared pessimistic about the potential of growth in the second half of the year noting that the diminishing returns from Windows 8 Blue (8.1) and Haswell should contribute to the softening end-demand in the PC market.

Perhaps most alarming though is the lack of any foreseeable solution to the PC market’s continued woes; as Citi Research noted:

“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. 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.”

According to Citi, the tablet market is expected to surge in 2013, while the Desktop and Notebook markets are expected to see sharp declines. Citi’s current projections show the tablet market will sell 237 million units compared to 144 million in 2012. Notebook sales should drop to 179 million units compared to 201 million units in 2012; and desktop sales are forecasted to drop to 137 million units from the previous 148 million units sold in 2012. 

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