Together these two tech titans can collaborate to deliver solutions that reduce complexity as well as improve productivity and security. Still, Microsoft must be careful not to alienate itself from Lenovo and Hewlett-Packard Company (NYSE:HPQ) as its war with Apple Inc. (NASDAQ:AAPL) and Google Inc (NASDAQ:GOOG) heats up.
And then we have Intel
Intel Corporation (NASDAQ:INTC) fairly recently appointed a new CEO, Brian Krzanich, who has reduced capital spending from $12 billion to $11 billion, and appears to have a mobile strategy with Intel’s Atom architecture, Silvermont, which will support both Windows and Android.
Mr. Krzanich also acknowledged some of Intel’s past strategic blunders. In fact, he stated that “Intel Corporation (NASDAQ:INTC) was slow to respond to the ultra-mobile PC trend. The importance of that can be seen in the current market dynamics. The traditional PC market segment is down from our expectations at the beginning of the year while ultra-mobile devices like tablets, are up.” So far, Wall Street has responded favorably.
3 things to watch
1. Dell going private. Over the past few months we have seen a lot of speculation about whether or not Dell will go private and the impact that this will have not only on the industry but also on Microsoft Corporation (NASDAQ:MSFT)’s relationship with Dell.
2. Strategic partnerships. Lenovo and EMC Corporation (NYSE:EMC)’s partnership should effectively more than balance the power of the Microsoft and Dell partnership. Moving forward, it will be interesting to see what other alliances emerge as a result of Dell Inc. (NASDAQ:DELL) going private.
3. Consumer sentiment. Despite a weak PC market, Hewlett-Packard Company (NYSE:HPQ), Dell and Lenovo have all significantly outperformed the NASDAQ. That is very interesting. Especially if you consider that the underlying fundamentals of these companies really haven’t changed that much if at all.
My foolish take
The entire PC-related market is arguably on life support: PC shipments are down, PC-like devices such as Netbook laptops don’t appear to be performing well, and smartphones are also under pressure. Yet, a significant shift in consumer sentiment (you should consider reading an article that I wrote several months ago, Hewlett Packard: Negative Sentiment Yields a Strong Value Play) has resulted in “old tech stocks” such as Hewlett-Packard Company (NYSE:HPQ) and to a lesser extent, Dell Inc. (NASDAQ:DELL) and Microsoft, trouncing the return of the NASDAQ over the past few months. This is in spite of the fact that Lenovo overtook Hewlett-Packard Company (NYSE:HPQ) as the leader in PC shipments and little has changed in terms of underlying fundamentals. This space is changing fast and it is important to monitor strategic relationships since they will be an important driver of innovative solutions.
Ryan Peckyno owns shares of Hewlett-Packard Company (NYSE:HPQ), Intel and Microsoft. The Motley Fool recommends Intel. The Motley Fool owns shares of Intel Corporation (NASDAQ:INTC) and Microsoft Corporation (NASDAQ:MSFT).
The article What Is Going on With the PC Industry? originally appeared on Fool.com.
Ryan is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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