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Things Go From Bad to Worse for the PC Market

By Andrew Tonner - Mar 6, 2014 at 1:30PM

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Investors get a grim reminder that the PC market's best days might in fact be behind it.

The global PC market hasn't exactly been a bed of roses over the past several years.

And even as it comes off a historically bad year, PC players like Microsoft ( MSFT -1.97% ) and Hewlett-Packard ( HPQ -0.24% ) are likely to be forced to bear another challenging PC market once again in 2014.

From bad to worse
Rewinding to this time last year, research firm IDC broke the unfortunate news that the global PC market had contracted 3.7% in 2012. Equally alarming, the research company also envisioned the personal computer market to decline by 1.3% in 2013, with envisioned being the operative word.

Fast-forward to today, and the same research firm now notes that the PC market shrank by 9.8% last year, fell another 6% in 2014, and should now remain in decline through the year 2018.

This presents clear challenges for companies like Microsoft or Hewlett-Packard that remain highly levered to the PC market to drive their respective financial performance. Worse yet, neither Microsoft nor Hewlett-Packard has been able to establish a meaningful presence in the tablet market that has so disrupted the PC market. Many expect Microsoft to eventually navigate this tricky transition. However, the future mobile future remains less certain for Hewlett-Packard. And in the video below, Fool contributor Andrew Tonner looks at the PC market outlook and how investors should be framing these challenging circumstances as well.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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HP Inc. Stock Quote
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$37.55 (-0.24%) $0.09
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