Sat, Sep 20, 2014 - Page 14 News List

PC trade over for this year: analysts

By Kevin Chen  /  Staff reporter

The global PC demand looks set to witness a substantial decline next year similar to what happened in the post-Y2K period in 2000, Barclays Capital Securities yesterday said in a client note.

The Y2K phenomenon refers to the worries about computer bug problems in 1999 that led to many users rushing to buy new computers or upgrade their systems ahead of the new millennium, but PC demand fell significantly in 2000.

Major research institutes and market watchers have projected that global PC shipments this year are to decline at a slower pace than previous years, as users refresh their machines following Microsoft Corp’s ending its support for Windows XP in April and as consumer demand stabilizes.

However, after this year’s corporate PC refresh cycle, the global PC market is likely to contract at a faster pace next year, Market Intelligence and Consulting Institute (產業情報研究所) senior manager Charles Chou (周士雄) said earlier this week at a Taipei forum.

“We believe the PC trade is over for this year,” Barclays Capital analysts led by Kirk Yang (楊應超) wrote in the note yesterday.

“Our biggest concern into 2015 is that with a relatively new installed PC base and without any revolutionary products or technology, there is no clear reason to buy more PCs, similar to events after Y2K,” they added.

Barclays Capital now predicts global PC shipments will drop by a sharper 5 percent year-on-year next year, compared with a 1.2 percent annual decline forecast by MIC.

Against this backdrop, the brokerage has downgraded its investment ratings for Asustek Computer Inc (華碩) and Compal Electronics Inc (仁寶), as well as cut its price targets and earnings for Acer Inc (宏碁), Quanta Computer Inc (廣達), Wistron Corp (緯創) and Lite-On Technology Corp (光寶).

Instead, as Apple Inc’s new iPhone models hit the market, the brokerage reiterated its preference for iPhone-related stocks, including Hon Hai Precision Industry Co (鴻海), Pegatron Corp (和碩), Catcher Technology Co (可成) and Largan Precision Co (大立光).

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