Stay Connected to These 3 Tech Values
The surprisingly big drop in PC shipments during the first quarter is no reason to avoid these undervalued technology-sector firms.
The tech world was taken aback this week when a report from the International Data Corporation showed that PC sales plummeted 14% in the first quarter, the largest drop in two decades. The industry had expected sales to be pressured, but the scale of the decrease was somewhat stunning.
There are a number of factors pushing sales lower. One is consumers' continued love affair with smartphones and, increasingly, tablets. There is no need to buy a shiny new laptop or desktop if more of your focus is on your mobile device. PC makers also haven't innovated enough to convince users that it is worth upgrading to newer models.
Intel's (INTC) push to get makers to slim down designs (so-called Ultrabooks) has been greeted with a resounding sigh. Microsoft's (MSFT) attempt to bring together the features of a desktop and tablet operating system in Windows 8 has hardly been a hit either. The new convertible form factors (laptops that convert into tablets) remain a niche product. Even Apple (AAPL), whose PC unit had been growing faster than its peers' for years, now is also seeing a slowdown.
Jeremy Glaser has a position in the following securities mentioned above: MSFT. Find out about Morningstar’s editorial policies.