The PC industry fared worse than anticipated last quarter and will continue to face rough waters ahead, according to J.P. Morgan analyst Mark Moskowitz.
In an investor's note out today, Moskowitz noted that Gartner saw a drop in PC shipments last quarter of 8.3 percent from a year ago and an increase of only 2.5 percent from the second quarter. Those results trailed Gartner's estimates of a decline of just 2.1 percent from a year ago and growth of 9.4 percent from the previous quarter.
"While investors had been preparing for a letdown, the magnitude of the miss was larger than what investors were expecting, in our view, and we see limited remedies in the near to mid term," the analyst said.
Moskowitz doesn't expect Windows 8 to convince enough consumers to refresh their PCs. Sales of ultrabooks have also been "disappointing," a situation unlikely to improve due to their relatively high prices. And faced with tight IT budgets, businesses have been delaying their Windows 7 PC migrations until they see some rebound in the global economy.
Consumers and companies alike also remain drawn to smartphones and tablets, which continue to eat up PC sales.
Moskowitz believes that people are more inclined to refresh their smartphones and tablets two or three times before buying a new PC.
Better management of inventory ahead of Windows 8 could boost results in the fourth quarter. But any upturn in shipments would be "limited and temporary," Moskowitz added. J.P. Morgan's current PC shipment forecast of 0.1 percent growth this year and 4.5 percent next year may ultimately prove too optimistic.