Last week at its annual financial analyst day Wednesday, HP CEO Meg Whitman said the company has a tough game of catch-up to play in hardware over the next few years. HP forecast earnings per share of US$3.40 to $3.60 for this fiscal year, below the prior estimate of $4.18 from analysts polled by Thomson Reuters. Whitman said the company needs to come up with a hit next-generation smartphone or other mobile device in order to maintain a leadership position over the next few years.
Meanwhile, even the mighty Apple has been hit by the decline in PC sales, both IDC and Gartner said. IDC said Apple sold 2.06 million Macs in the quarter, a drop of 7 percent year over year. Gartner said the decline was 6.1 percent.
The PC slump is affecting chip makers as well.
In a preliminary financial report, Advanced Micro Devices on Thursday slashed its sales forecast for the third quarter, blaming a tough economy for the decline. Intel's main rival now forecasts revenue for the quarter to drop by about 10 percent from the second quarter, compared to prior estimates that the decline would be no worse than 4 percent.
Though the U.S. economy appears to be slowly recovering from the Great Recession, IT hiring has leveled off recently. Last week's jobs report from the U.S. Bureau of Labor Statistics showed that the overall unemployment rate for September was 7.8 percent -- the lowest point since U.S. President Barack Obama took office. But things were not looking up for IT. In September, the IT industry lost 1,700 jobs, according to the report.
Next week some of the biggest names in IT will be reporting earnings. IBM, Microsoft, Google, AMD, Intel and Nokia are all due to report, and IT market watchers will get a broader picture of how the tech market is doing.