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Market for desktops on decline

Queena Kim Jan 24, 2013
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Market for desktops on decline

Queena Kim Jan 24, 2013
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It hasn’t been a good year for makers of desktops. To understand what’s happening, meet John Song. He manages a family business, is married and has two kids, Nathan, 10, and Audrey, 8.

And how many computers does his family have?

“We have one desktop and everything else is pretty small and mobile,” John said.

He adds that his family is online a lot, but his wife surfs the web on an iPad. And his kids?

“The kids, they don’t have their own computers but they’ve inherited our old iPhones and they work fine in terms of getting onto the Internet,” he said.

John’s family is typical of a shift that’s happening in wired households across the U.S., said Mika Kitagawa is an analyst at Gartner. And that shift — plus a depressed global economy — delivered a blow to PC shipments last year.

“Overall market was down 3.5 percent, which was the first decline since 2002,” she said.

That’s right, for the first time in 10 years, the desktop market has slipped and that drop has set-off a chain reaction. Acer and HP, two of the world’s largest PC manufacturers, are struggling. And Kitagawa says Dell’s computer shipments were down 20 percent in the last quarter.

That’s sent Dell’s stock down so far that founder Michael Dell is trying to take the company private in an effort to reinvent it.

And the pain doesn’t stop there. Chip makers like Intel and AMD have been hit too, said JoAnne Feeney, a semi-conductor analyst at Longbow Research.

“Both Intel and AMD have found themselves out in the cold neither of them has had products that have been tuned to the specific needs of tablets,” she said.

But they’re working on that. And Feeney says that while the PC market is down its nowhere near out. There is after all the rest of the world. China just surpassed the U.S. as the world’s largest desktop market. And Feeney says businesses in the developing world still have a lot of buying to do.

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