AMD has scary things to say about the PC market

The chief executive of Advanced Micro Devices, the second largest PC processor supplier, had some pretty dire things to say about the state of the PC market.

Is the popularity of tablets like Google's Nexus beginning to manifest itself in shrinking PC sales?
Is the popularity of tablets like Google's Nexus beginning to manifest itself in shrinking PC sales? Google

Advanced Micro Devices, the world's second largest PC processor supplier, had some sobering things to say about the PC market when the company reported earnings Thursday.

"For the first time since 2001, client PC shipments have declined sequentially for three consecutive quarters-and have been below historical averages for the last seven quarters," AMD CEO Rory Read said during the chip supplier's second quarter earnings conference call.

"We also believe the PC industry may be resetting to a new [lower] baseline," he said.

Revenue declined 10 percent to $1.41 billion for the the Sunnyvale, Calif.-based company.

AMD, which is particularly sensitive to consumer PC demand, also said sales will be down 1 percent, plus or minus 3 percent, in the third quarter from the second.

That's a steep drop from historical trends. AMD's sales have grown on average 14 percent from the second quarter to the third over the past 10 years, according to Mike Burton, an analyst at Northland Capital Markets, whose comments were cited in a Bloomberg report.

While Intel, the world's largest chipmaker, wasn't as negative as AMD, CEO Paul Otellini said earlier this week that it was only expecting full-year revenue growth in the 3 percent to 5 percent range versus previous expectations of "high single digits."

This may be the first signs of the "Post-PC era," said a Piper Jaffray analyst. "Consumers are prioritizing smartphones and tablets at the expense of PCs," wrote Gus Richard in a research note.

And market researcher Gartner said last week that "consumers are less interested in spending on PCs" and more interested in purchasing "the latest smartphones and media tablets."

About the author

Brooke Crothers writes about mobile computer systems, including laptops, tablets, smartphones: how they define the computing experience and the hardware that makes them tick. He has served as an editor at large at CNET News and a contributing reporter to The New York Times' Bits and Technology sections. His interest in things small began when living in Tokyo in a very small apartment for a very long time.


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