Intel's lowered forecast 'isn't a good sign' for PC industry

Chip maker's Q3 numbers not as strong as earlier expected

By , Computerworld |  IT Management, Intel

Rob Enderle, an analyst with the Enderle Group, noted that many PC makers may have scaled back production as they nervously wait to see whether Microsoft's Windows 8 operating system will be popular with buyers. That, he said, is one of several issues affecting the PC market, and hence the chip market, as well.

"It's the combination of tablets and an existing slowdown prior to a new OS," said Enderle. "The difficulty is that Microsoft's demand-generation program for Windows 8 hasn't kicked off yet, so no one is seeing demand for that product. If you look into the market, no one, not even Apple, is pushing traditional computers now and consumer buying continues to decline."

Not all is bleak, however.

Lenovo seems to be bucking the downward trend.

The China-based computer manufacturer has been quickly moving up the rungs of the list of top computer makers. While other companies have been struggling, Lenovo has been moving ahead.

At this point, if Lenovo continues on at its current pace, it will surpass long-time top PC-maker Hewlett-Packard to become the world's largest PC manufacturer by early next year.

"HP recently reported a 10% drop in its PC unit and we've seen Dell's PC business sliding, as well," said Olds. "The only PC vendor showing much growth is Lenovo, playing on their home court advantage in Asia.... I simply think people are taking a much closer look at all the technology they're buying and starting to ration their spending."

Charles King, an analyst with Pund-IT, Inc., was quick to note that the fourth quarter of this year is unlikely to look any better.

"It suggests PC vendors are preparing for lower demand in the final quarter of the year by reducing existing inventory rather than gearing up manufacturing," he said. "Given the overall importance of the holiday shopping season to the consumer electronics and PC industries, that's lousy news."


Originally published on Computerworld |  Click here to read the original story.
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