IDC: Economic uncertainty, Windows 8, tablets blamed for PC chip drop

PC microprocessor market decline hits Intel hard

Economic uncertainty, delays in PC purchases caused by the Windows 8 launch and the tablet's displacement of low-end PCs all contributed to a 2.4 percent drop in PC microprocessor revenues last year, according to the latest figures from research firm IDC.

These factors will contribute to a continued market slowdown through the first half of 2013, predicted Shane Rau, vice president for PC and server semiconductor and enabling technologies research at IDC.

However, the PC microprocessor market is expected to rebound in the latter half of 2013, contributing to a 1.6 percent increase in overall revenues and a 3.2 percent increase in shipments, Rau observed.

Microprocessors for mobile PCs, desktop PCs and PC servers are projected to generate $40.7 billion in revenue this year, with 384 million units expected to be shipped, according to Rau.

Over the long haul, IDC expects the PC microprocessor market to increase at a 3.4 percent compound annual growth rate (CAGR) through 2016 and unit shipments to increase at a 3.2 percent CAGR for the same period.

Reflecting the weakness in the PC market, chip giant Intel (Nasdaq: INTL) is expected to post weak results in the fourth quarter, according to an analysis by Trefis published by Forbes. At the same time, Trefis believes Intel has strong fundamentals that will ultimately lead to a high value for its stock, which currently hovers around $22 per share.

Intel is struggling to make the transition from PC chip maker to smartphone chip maker, a market currently lead by Qualcomm (Nasdaq: QCOM). According to the latest stats from Strategy Analytics, Intel has a meager 0.2 percent of the smartphone processor market.

For more:
- see IDC's stats
- read the Forbes article about the Trefis analysis
- check out the Strategy Analytics figures


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