HP shares tanked Wednesday, a day after its announcement, dropping $4.64 to close at $43.59, though its stock drifted up Friday along with the rest of the market.
Worldwide PC microprocessor shipments, an indicator of how the hardware market is doing, flagged in the fourth quarter last year according to anIDC report Thursday.
PC microprocessor shipments in the calendar fourth quarter of 2010 were down by 0.04% from the third quarter and down 0.21% from the year-earlier quarter, IDC said. For 2011, IDC predicts growth in microprocessor shipments due to increasing sales of mobile devices, but the increase will be much lower than last year.
For 2011, IDC forecasts 10.1% growth, compared to a 17.1% increase last year. It's not just tablets that are siphoning off sales of PCs. Concerns about the economy and consumer spending play a part.
"The effects of emerging devices, like media tablets, and economic concerns in Europe and the U.S., lead us to be conservative in our overall outlook," said Shane Rau, director of Semiconductors: Personal Computing research at IDC.
Investors apparently overlooked the weak aspects of the IT market this week, focusing on the good news. Salesforce was credited with helping a surge in tech stocks midday Friday, as the IT-heavy Nasdaq jumped 30 points to 2768.
In addition, macroeconomic news may be helping confidence just as much if not more than the good news about enterprise IT sales. Fears of an oil shortage were eased Friday as Saudi Arabia raised oil output to make up for Libyan exports disruption caused by political unrest. Midday Friday the Dow was up by 58 to 12,126 and the S&P 500 was up by 12 to 1,318.
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