2 Companies With the Most to Lose as the PC Dies

By Trey Thoelcke Updated Jan 13, 10:27AM EST · Published Apr 22, 7:15AM EDT

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2 Companies With the Most to Lose as the PC Dies — © Thinkstock

The personal computer (PC) is slowly but surely dying. The latest evidence comes from U.S. chipmaker Intel Corp. (NASDAQ: INTC), which just made public its intentions to cut 12,000 jobs globally, on the back of a weakening PC industry and the resulting necessity for a reshuffle and refocus. Intel intends to revamp its operations to tender to the increasing shift toward mobile devices. Markets have not been particularly sympathetic to this suggestion, however, and Intel’s stock is down close to 10% on its 2016 highs.

The workforce trim is representative of a wider market shift, and a number of other layers in the space look set to be forced into revamping operations to accommodate industry trends. Here are two that could struggle as 2016 plays out.

AMD

Advanced Micro Devices Inc. (NASDAQ: AMD) builds and sells microprocessors and chips, the vast majority of which go toward a PC build. Its products are still very popular with a fringe of the PC space — specifically gamers and other high performance demand customers — but this fringe makes up a very small fraction of the overall market. The much larger portion is the casual use space. Most of these customers are shifting to mobile devices. For the everyday tasks of the casual PC user — email, internet browsing and so on — desktops (and even laptops, to some extent) are becoming obsolete, as mobile devices cater increasingly well to these tasks. With the concurrent shift from web interface to application based interaction, this trend is becoming even more pronounced.
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Seagate

Back in September, Seagate Technology PLC (NASDAQ: STX) traded for a little under $70 a share. It now struggles to break $25, for a 65% decline in less than a year and a half. The company builds the components required for PC and laptop hard disk drives (HDDs). Not only are PCs becoming obsolete in themselves, but the majority of storage is shifting to flash, solid-state drive (SDD) (as is the case with a number of netbooks and powerbooks) or external memory cards such as secure digital (SD). Seagate accounts for nearly 40% of the HDDs built and sold in the United States, and as flash and alternate storage technologies become increasingly prevalent, the company is going to have to adapt or die. Either way, a serious reshuffle is going to be required, and this will likely weigh on its market capitalization as 2016 matures.

By Matt Winkler

About the Author Trey Thoelcke →

Trey has been an editor and author at 24/7 Wall St. for more than a decade, where he has published thousands of articles analyzing corporate earnings, dividend stocks, short interest, insider buying, private equity, and market trends. His comprehensive coverage spans the full spectrum of financial markets, from blue-chip stalwarts to emerging growth companies.

Beyond 24/7 Wall St., Trey has created and edited financial content for Benzinga and AOL's BloggingStocks, contributing additional hundreds of articles to the investment community. He previously oversaw the 24/7 Climate Insights site, managing editorial operations and content strategy, and currently oversees and creates content for My Investing News.

Trey's editorial expertise extends across multiple publishing environments. He served as production editor at Dearborn Financial Publishing and development editor at Kaplan, where he helped shape financial education materials. Earlier in his career, he worked as a writer-producer at SVE. His freelance editing portfolio includes work for prestigious clients such as Sage Publications, Rand McNally, the Institute for Supply Management, the American Library Association, Eggplant Literary Productions, and Spiegel.

Outside of financial journalism, Trey writes fiction and has been an active member of the writing community for years, overseeing a long-running critique group and moderating workshop sessions at regional conventions. He lives with his family in an old house in the Midwest.