Wall Street must be pretty muted today. It has been a bad week with a lot of big companies calling out some pretty miserable results. IT companies are no exception, but we’re not going to talk about Twitter here. Instead, we’ll simply say Sony’s figures were so bad, that it has decided to pull out of the personal computer market.
It has also decided to pull out of the television manufacturing space, but we don’t really care about that. But PC’s are different though and the announcement by Sony comes just a day before Gartner published figures to show that the European PC market is down another 4 percent.
There are no recent figures for the US market yet, but they should land soon. While analysts will be looking desperately to find a silver lining, it’s a good bet that those figures are going to be pretty poor, too.
All that stuff about the death of the PC ... Maybe it really isn't exaggerated.
PC Market Decline
It’s an interesting time for those watching this market because the decline is more than just a reflection of the economic crisis. Rather, the shift reflects a fundamental change in the way we access information and collaborate with our colleagues.
For manufacturers that can’t keep up with that shift, it’s a disaster, and Sony’s figures show that. This quarter it expects to lose around $1.1 billion. The result is that it’s getting out of the PC market.
For all intents and purposes, it is the first household name that has decided to call it at day with PCs, and it’s possible that others will follow.
Sony is looking for a buyer for this business, although where that buyer might be is not at all obvious. Maybe China's Lenovo might take a shot at it — it seems to have some pretty deep pockets and a big investor with even deeper ones — but there are others that are still in the market despite the turbulence.
Google will own a 5.94 percent stake in Lenovo worth $750 million once Lenovo's deal to buy Google's Motorola handset division closes, according to a disclosure on the Hong Kong stock exchange.
Devices in 2014
It’s possible that PC makers are looking at Gartner’s post-Christmas predictions around the devices market that suggest that the decline in PCs had bottomed out. But things are still not looking good.
Gartner analyst Tracy Tsai predicted the global slide in personal computer shipments would slow in the fourth quarter last year to a 3 percent year-over-year drop, compared with an 8.6 percent year-over-year fall in the third quarter.