IDC Cuts PC Shipment Estimate to a 1.3% Decline in 2013 (MSFT, HPQ, DELL)

IDC Cuts PC Shipment Estimate to a 1.3% Decline in 2013 (MSFT, HPQ, DELL)

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On Monday, analysts at research firm IDC cut their growth estimates for PC shipments in 2013 from an increase of 2.8% to a drop of 1.3% as competition from tablets and a lukewarm reception to Microsoft Corporation’s (MSFT) Windows 8 hampers PC consumption.

PC sales have been on the decline for years, as the rise of Apple’s (AAPL) Mac products and a growth in mobile products have turned consumers away from personal computers. This has been hard for companies like Hewlett-Packard (HPQ) and Dell (DELL) as they have struggled to keep up with the changing market environment. This recent downgrade from IDC shows that these companies may be in for an even more difficult year than previously expected.

Though tablets and other mobile systems are not direct competitors to PCs on a functional level, the rise of these products has driven consumer dollars away from other computing systems like PCs.

Microsoft had hoped that its roll out of the Windows 8 operating system in October would be a breath of fresh air for the struggling PC market. However, Windows 8 has yet to impress consumers; its system has confused most users. It is another hurdle that PCs must overcome to show signs of life again.

On the other hand, some analysts believe that it may take time for consumers to truly adapt to the new system; PCs may have a chance of growth in the latter half of 2013 as Windows 8 gains a larger acceptance.

The one area that had been a positive for PCs was in emerging markets, but there are signs that this may be slowing as well. IDC expects limited growth in these emerging markets as well, especially as more economies begin to mature.

PCs may be in for a tougher, uphill battle than previously expected.

Microsoft shares were up 34 cents, or +1.19%, during Tuesday morning trading. The stock is down -10.53% over the past twelve months. Hewlett-Packard shares were up 43 cents, or +2.11%, on Tuesday while Dell shares were up 4 cents, or +0.28%.

The Bottom Line
Shares of Microsoft (MSFT) have a dividend yield of 3.23% based on Tuesday’s intraday trading price of $28.49 and the company’s annualized dividend payout of 92 cents per share. Shares of HP (HPQ) have a dividend yield of 2.60% based on Tuesday’s intraday trading price of $20.40 and the company’s annualized dividend payout of 53 cents per share. Shares of Dell (DELL) have a dividend yield of 2.28% based on Tuesday’s intraday trading price of $14.04 and the company’s annualized dividend payout of 32 cents per share.

Microsoft Corporation (MSFT) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars. Hewlett-Packard (HPQ) is not recommended at this time, holding a Dividend.com DARS™ Rating of 2.9 out of 5 stars. Dell (DELL) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.2 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks, as well as a detailed explanation of our ratings system here.

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