Slower Economic Growth in China Likely to Lead to Less Impressive Global PC Sales

By Ed Silverstein July 16, 2012

Microsoft and Intel are likely going announce less impressive quarterly sales numbers – given China’s lower demand for personal computers and overall global economic conditions.

The sales numbers are important given that more than 80 percent of PCs worldwide operate on Intel and Microsoft, according to Bloomberg News. Intel is the world’s top manufacturer of microprocessors and Microsoft is the top-ranked software company. Both companies are scheduled to announce their quarterly earnings sometime this week. Bloomberg said analysts predict sales at both companies increased no more than five percent when compared year-to-year.

The rate of growth has slowed in China, and it is the biggest PC market globally. In addition, studies show that tablets and smartphones are more popular than PCs.

The conditions in China come on top of a recession in Europe and a slow recovery in the United States.

In a related matter, Advanced Micro Devices Inc. (AMD) reported last week that its Q2 revenue dropped 11 percent. The drop was blamed on market and economic conditions in China and Europe. AMD had predicted earlier that Q2 revenue was going to increase six percent.

Overall, China reported its economy advanced 7.6 percent during the second quarter compared to the same time period during the previous year – which is the smallest expansion in three years, Bloomberg reports, citing a recent study from the Chinese government.

In a related matter, the International Monetary Fund reported on Monday that China’s economy will increase eight percent in 2012 and 8.5 percent next year – which is less than previous forecasts, according to a report. Overall, the IMF predicted a global expansion of 3.5 percent for 2012, slightly less than the 3.6 percent projection in April. The global economy will increase 3.9 percent during 2013, less than a previous projection of 4.1 percent. In addition, the IMF is now projecting that the U.S. economy will increase by two percent in 2012. The U.S. economy is expected to increase 2.3 percent in 2013, The IMF adds. These are lower amounts than those made in earlier predictions.

Edited by Brooke Neuman

TechZone360 Contributor

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