Wall Street Beat: Tech sales news mixed ahead of earnings

Top vendors are set to release earnings as PC sales flatten after a period of decline and tablet growth drops

By , IDG News Service |  IT Management

News about how tech sales are doing has been mixed, ahead of a flood of earnings reports from vendors.

The roll call of companies due to report earnings next week includes some of the top names in tech: IBM, SAP, Yahoo, Intel, Advanced Micro Devices, Google and Twitter.

Meanwhile, a variety of market research reports and a cautious forecast from Samsung paint a picture that is cloudy, albeit with some sunlight peeking through.

NPD DisplaySearch made waves this week when it reported that tablet shipments for the first time ever declined in the first quarter. Shipments of tablet PCs were 56 million, down by 3 million from a year earlier, according to NPD.

NPD also makes it clear that tablet market growth is slowing down for the long term. The company said that it has lowered its forecast for tablet shipments in 2014 to 285 million. That's 30 million lower than its February forecast.

In addition, in February, NPD said that by 2017, tablet shipments will climb to 455 million. It now believes that figure to be less than 400 million. Tablet market growth will slow down from 14 percent this year to single digits by 2017, NPD said.

There is weakening demand for tablets with 7-inch screens, which comprise the bulk of the market, NPD said. Competition from larger-screen smartphones is also hurting tablets, it said.

In any case, a slowdown in tablet shipments is bad news for tech. "For the past several years, tablet PCs and smartphones have been the primary growth driver in the smart device category," NPD said in its report.

There is bad news for smartphones as well. Samsung Electronics said it's expecting a drop in its operating profit for the third consecutive quarter, citing among other issues an overall slowdown in smartphone market growth.

The South Korean company, the biggest manufacturer of smartphones and tablets, said its operating profit will fall to between 7.0 and 7.4 trillion won (US$7.3 billion) from 9.53 trillion won in the second quarter last year.

Samsung said tablet sales were sluggish because, among other things, they have a longer replacement cycle than that of smartphones.

Tablet shipments are also slowing down simply because the market is becoming saturated, analysts point out. People who are prone to trying new gadgets and have the money to do so have already jumped on the tablet bandwagon -- getting the remainder of the world's population on board will be harder.

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