Wall Street Beat: Mixed news for tech puts dent in sector confidence

Nasdaq Computer index closes down for the week

By , IDG News Service |  Hardware

Mixed news for hardware and some disappointing software vendor financial reports this week appeared to put a dent in confidence in the IT sector.

Gartner forecast yet more bad news for traditional PCs and laptops. It's been known for some time that smartphones, tablets and hybrid devices such as so-called "phablets" are putting a damper on PC sales. On Thursday, Gartner issued a forecast that calls for a 6.6 percent year-over-year decline in PC and laptop shipments in 2014.

What's more, the 276.7 million PCs shipped to retailers in 2014 will drop even further, to 263 million units, in 2015, Gartner said.

Gartner offered a silver lining, however. Adding smartphones, tablets and hybrids into the mix, worldwide combined shipments of devices is increasing at a faster rate this year than last year, it said.

Shipments of PCs, tablets, ultramobiles and mobile phones are projected to reach 2.5 billion units in 2014, a 6.9 percent increase from 2013, according to Gartner. That's a faster growth rate than the 4.8 percent for combined devices in 2013, Gartner said. Worldwide combined shipments of devices will further increase to 2.6 billion units in 2015, Gartner added.

Even this good news came with a note of caution, though. As the overall device market starts to saturate, pressure on margins will continue to increase, and vendors will have to look at different ways to cope with the ongoing issue of lower margins, Gartner said.

Meanwhile, though smartphone sales are booming, the rising tide is not lifting all boats in that market. BlackBerry continued to suffer in its latest fiscal quarter, announcing Friday that revenue plunged 64 percent year over year to $976 million. The company went from a $98 million profit a year earlier to a $423 million net loss.

The essential problem is that the company is not selling enough of its new phones. The company said it sold about 3.4 million BlackBerry smartphones to end users last quarter, compared to 6 million a year earlier.

Devices running on the BlackBerry 10 system are not selling as well as the company had hoped a year ago, though officials said cost controls were proceeding ahead of schedule, helping the company beat analyst expectations.

Excluding one-time items, the company reported a loss of $0.08 cents a share, while analysts polled by Thomson Reuters had forecast a loss of $0.55 a share. Nevertheless, company shares closed at $8.41 Friday, down by $0.64.

Overall, software is expected to drive IT spending growth this year. Software results this week were not uniformly bright, however.

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