Apple (AAPL) Price Action Muted Amid PC-Related Sell-Off
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Price: $309.35 -0.63%
Rating Summary:
45 Buy, 28 Hold, 9 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Rating Summary:
45 Buy, 28 Hold, 9 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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PC-related stocks were slammed on Thursday, a declined that is being tied to reports of softer-than-expected Q1 shipments. According to a report by IDC, PC unit shipments declined 13.9 percent. The drop in PC sales is being traced to increased demand for tablets and smartphones, Apple's (Nasdaq: AAPL) bread and butter. But Apple sells computers as well, so it was not completely immune to the slowdown.
Commenting on the news, Wells Fargo analyst Maynard Um said, "Apple's U.S. shipments declined 7.5% yr/yr vs. our expectation for a 4.6% yr/yr growth, but note IDC data does not show Apple's international shipments, which we believe are likely growing faster."
"While unit decline reflects Apple is not immune from the slowdown, it, unlike its peers, is at least participating in the tablet market. 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% unit share," added Um.
In response to the threat from Apple and other tablet makers, PC-makers created a number Windows 8 devices and so-called 'hybrid' touchscreen PCs. So far the devices haven't gained traction.
In order for PC industry trends to reverse, Wells Fargo thinks tablets will have to reach saturation, allowing consumer spending to flow back into PCs. Alternatively, pricing on PCs would have to become much more attractive. Ultimately Um thinks the PC industry will consolidate.
For Apple, its biggest threat at the moment remains Samsung and other Android smartphone and tablet devices.
Commenting on the news, Wells Fargo analyst Maynard Um said, "Apple's U.S. shipments declined 7.5% yr/yr vs. our expectation for a 4.6% yr/yr growth, but note IDC data does not show Apple's international shipments, which we believe are likely growing faster."
"While unit decline reflects Apple is not immune from the slowdown, it, unlike its peers, is at least participating in the tablet market. 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% unit share," added Um.
In response to the threat from Apple and other tablet makers, PC-makers created a number Windows 8 devices and so-called 'hybrid' touchscreen PCs. So far the devices haven't gained traction.
In order for PC industry trends to reverse, Wells Fargo thinks tablets will have to reach saturation, allowing consumer spending to flow back into PCs. Alternatively, pricing on PCs would have to become much more attractive. Ultimately Um thinks the PC industry will consolidate.
For Apple, its biggest threat at the moment remains Samsung and other Android smartphone and tablet devices.
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