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You Are Here: Home > Articles > Contributors > PC business down the tubes

PC business down the tubes
Jan 08, 2009

Sal

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Yesterday I wrote that investors should not be fooled by the increase in New Orders for Computers & Electronic Products in the most recent manufacturing report (read that post).
Prompt confirmation was provided today:

Lenovo surprised by indicating they are now expecting a quarterly loss. They further indicated that they will be cutting 2500 employees or 11% of the workforce. The company pointed to lower demand in the commercial sector and slowing sales in China, one of its main markets.
Intel revealed that Q4 revenue will now be below expectations: down 20% from the last quarter and down 23% year-over-year. This is lower than its previous guidance which was provided only on November 12. The company said it was impacted by slowing demand from end users and a build-up of inventory in the supply chain.

This goes to show that the PC industry is caving in. Intel was surprised by a drop in revenue over the course of less than two months. Intel is usually pretty good at predicting its quarterly numbers. This implies that December was even weaker than many thought.
It looks like a cold, hard winter for the PC industry. Maybe Intel should apply to be a bank holding company.