2 Stocks to Watch From the Challenging Computer Industry
In This Article:
The Zacks Computer – Micro Computers industry participants are suffering from waning demand for consumer PCs. Geopolitical challenges, including persistent inflation and high interest, are major headwinds. Weak demand in China has been a headwind. However, industry participants are benefiting from steady demand for enterprise devices, including laptops, tablets and smartphones. Industry participants like Apple AAPL and Dell Technologies DELL are benefiting from these trends. The improving availability of 5G-enabled smartphones has been a key catalyst for industry participants. The launch of foldable and AI and ML-infused smartphones, tablets, wearables and hearables is another major growth driver for the industry participants. Robust demand for production printers, materials and software bodes well for 3-D printing solution providers.
Industry Description
The Zacks Computer – Micro Computers industry comprises companies that offer smartphones, desktops, laptops, printers, wearables and 3-D printers. Such devices are based either on iOS, MacOS, iPadOS, WatchOS, Microsoft Windows, or Google Chrome and Android operating systems. The companies predominantly use processors from Apple, Intel, AMD, Qualcomm, NVIDIA and Samsung. Expanding screen size, better display, and enhanced storage capabilities have been the key catalysts driving the rapid proliferation of smartphones. This has been well-supported by faster mobile processors. Laptops, both consumer and commercial, benefit from faster processors, sleek designs and expanded storage facilities. The addition of healthcare features has been driving the demand for wearables.
3 Micro Computer Industry Trends to Watch
Enterprise Adoption Remains Healthy: Strong enterprise demand has been benefiting the industry participants. The growing adoption of a hybrid working environment bodes well for the players, as demand for laptops and tablets is expected to increase. Demand for smart devices that offer facial recognition, retina scans or finger impressions to verify the user for biometrics is gaining traction as enterprises enhance security.
Impressive Form Factor Drives Demand: Expanding screen size, better display and enhanced storage capabilities have been the key catalysts driving the rapid proliferation of smartphones and tablets. This has been well-supported by faster mobile processors from Qualcomm, NVIDIA, Apple and Samsung. Improved Internet penetration and speed, along with the evolution of mobile apps, have made smartphones indispensable for consumers. Improved graphics quality is making smartphones suitable for playing sophisticated games. This is driving the demand for high-end smartphones and opening up significant opportunities for device makers.
AI-enabled PCs to Boost Demand: Personal computers (desktops and laptops), be they Windows or Apple’s MacOS-based ones, are expected to benefit from AI infusion. Canalys expects AI-enabled PC shipments to reach 48 million in 2024, representing 18% of total PC shipments. AI-capable PC shipments are projected to surpass 100 million in 2025, which will represent 40% of all PC shipments. This offers significant growth opportunities for industry participants.
