Analyst: PC market crash makes consolidation "inevitable"

Posted by Trent Nouveau

Yesterday IDC reported that worldwide PC shipments totaled 76.3 million units in the first quarter of 2013 (1Q13) - plummeting 13.9% compared to the same quarter in 2012.

And today Wells Fargo analyst Maynard Um says the latest sales data is the strongest indication yet that the PC market is in line for a long overdue shakeup in the form of consolidation.

Indeed, as AppleInsider's Neil Hughes notes, even Cupertino saw its domestic sales slide 7.5 percent in the three-month span, although the Mac platform is still in arguably better shape than the overall PC market. However, IDC's data does not include international sales, which Um believes are likely growing faster than the U.S.

"While unit decline reflects Apple is not immune from the slowdown, it, unlike its peers, is at least participating in the tablet market," he explained.

"While new entrants offering low priced tablets are causing some share shifts, we believe Apple will continue to dominate dollar profit share — more than half of the industry profits despite 10 percent share."

Um says the industry is likely to see a "markedly different" PC landscape in a few years with fewer players, although in the short-term future, the PC market will "continue to feel pain."

According to Um, the situation likely won't reverse itself until tablets reach a level of market saturation and PC prices become "materially more attractive" for the new touchscreen and ultrathin devices.

It should be noted that the decline of the PC was predicted by late Apple co-founder Steve Jobs in 2010, when he said the debut of the iPad signaled the beginning of a market-wide transition to a post-PC era.

"The transformation of the PC to new form factors like the tablet is going to make some people uneasy because the PC has taken us a long ways," Jobs explained way back when.

"[Yes], the PC is brilliant… and we like to talk about the post-PC era, but it's uncomfortable."