Weak PC sales blamed on economic woes and mobile devices
Published: 20th Jul 2012 13:23:45
AMD (Advanced Micro Devices) has become the latest firm to warn of weaker-than-expected PC sales.
The US computer chip maker highlighted China as an area of particular concern.
The news follows a report by research firm IDC which suggested PC shipments to Asia Pacific had begun to shrink between April and June.
Economic uncertainty, the rise of mobile devices, the dollar's strength and the upcoming release of Windows 8 have all been linked to the trend.
AMD discussed the problem in a conference call after it posted $37m (£23.6m) of net income for its second quarter representing a 39% drop on the previous year.
"It is clear that global economic activity is slowing, and this is impacting the PC market," chief executive Rory Read said, according to a transcript published by financial site Seeking Alpha.
"For the first time since 2001, client PC shipments have declined sequentially for three consecutive quarters and have been below historical averages for the last seven quarters.
"We expect macro headwinds will continue for the third quarter. We also believe the PC industry may be resetting to a new baseline and that full year industry growth estimates will be reduced."
He added that weak sales of chips designed for desktop computers had first become evident in China before "spreading across the globe".
The comments align with an IDC study which suggested that 30.7 million PCs were shipped to Asia Pacific, excluding Japan, between April and June. That marks a 1% fall on the same period last year.
"Ongoing turbulence in western economies has finally caught up with markets in this part of the world as well, with distractions from competing product categories like smartphones and tablets not helping matters either," said the firm's market analyst for the region, Avinash Sundaram.
His figures suggested that US PC-makers had been worst-affected, with Hewlett Packard seeing a 19% drop in demand, and Dell an 18% drop.
IDC's figures suggest that PC sales did grow in Europe, the Middle East and Africa over the same period, but only in light of poor figures the previous year.
The news follows concerns raised by the world's biggest PC chipmaker, Intel, on Tuesday.
Its chief executive, Paul Otellini, said October's Windows 8 system software release should boost PC sales to consumers later in the year, but in the meantime the industry faced challenges.
"What we had expected that we would see by now is that the US and Western consumer businesses would be recovering from the sort of softness that we've seen for several quarters... [we are] not seeing that," he said.
"In terms of China and Brazil... Russia and India - in some of the countries we're seeing the prices of computers go up as a result of the currency fluctuations against the dollar. Most PC components including ours are sold globally in dollars and the PCs are typically priced in dollars.
"So we add all those together plus the fact that enterprise is doing pretty good, you come down to a more muted growth scenario than we first thought."
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Harvard CitationBBC News, 2012. Weak PC sales blamed on economic woes and mobile devices [Online] (Updated 20th Jul 2012)
Available at: http://www.ukwirednews.com/news/1441757/Weak-PC-sales-blamed-on-economic-woes-and-mobile-devices [Accessed 20th Apr 2014]
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With the doors to its brand new £1million training centre officially open, one of the UK's leading apprentice training providers, Bristol based S&B Automotive Academy, is showcasing its world-class facilities by launching a series of foreign student exchanges for the first time in its 41-year history. To get a flavour of what life is like as an apprentice in the UK, the Academy hosted 16 apprentice engineers and bus drivers from the G9 Automotive College in Hamburg, Germany, as part of a Europe-wide vocational training initiative called the ‘Leonardo Programme’ with support from the European Social Fund. In a reciprocal arrangement, S&B will be sending nine apprentices to Germany during February 2012 so that they can get an appreciation of life in the automotive industry on the Continent. A further three German exchange groups are being planned for next year. Designed to assist the development of vocational skills and training across Europe, including work placements for trainees, the Leonardo Programme has a budget of €1.75bn, which is helping to encourage UK organisations to work with their counterparts abroad. In what is expected to be another challenging year for employers in the UK automotive sector, S&B’s Chief Executive, Jon Winter, claims that the exchange initiative will bring many benefits to the Academy and its apprentices: “In a world of global automotive brands, it’s important for our learners to understand the international context of the industry they have chosen to make their career. This new exchange programme will enable apprentices and Academy staff alike to achieve a better understanding of the challenges and opportunities within the automotive arena in Europe. With the Academy’s influence also extending to the USA and Asia, there’s every possibility that this initiative could move further afield in the future.” Continued Winter: “The need for skilled technicians across the world is on the increase and we actively encourage our apprentices to look at broader horizons during their training. Many of them have already learned the phrase ‘Vorsprung durch Gelehrtheit’, quite simply, ‘Advancement through learning.” In the 2010/11 academic year, S&B doubled the number of successful Apprenticeships over the previous year with some 350 apprentices graduating from the Academy. At the same time, achievement levels reached an all-time high with an overall success rate of 85%. For those learners on the Advanced Apprenticeship three-year programme, success rates were even higher, at over 98%. PHOTO CAPTION: As part of their exchange visit, S&B Automotive Academy arranged for the German apprentices to visit Hampshire bus operator, Bluestar, at its Barton Park depot. The students are pictured with S&B’s Andy West (3rd right) and Steve Prewett, Bluestar’s Area Engineering Manager (2nd right). Ends http://www.sandbaa.com
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