"Most vendors continue to struggle with the slow market environment and product changes," said Loren Loverde, an IDC vice president, in a research release. "Although we don't see media tablets and other devices replacing PCs, questions on how products will evolve and consumer interest in these and other categories are providing a distraction. "
Meanwhile, not all smartphone makers are reaping benefits from the exploding uptake of the devices. Sony Ericsson on Friday said an increase in the average selling price of its phones just barely offset a 9 percent fall in mobile phone shipments. It barely broke even in the third quarter, generating sales of €1.59 billion, compared to €1.6 billion a year earlier.
Though the hardware sector is in turmoil, the software arena, especially enterprise applications, appears to be instilling an underlying confidence in tech. With Friday's gains, computer makers are up more than 4 percent for the year on the Nasdaq.
An easing of economic worries also helped fuel shares this week. French and German officials are putting the finishing touches on a plan to deal with the sovereign debt of Greece, and potentially Italy and Spain, in time for an E.U. meeting Oct. 23. Meanwhile the U.S. Commerce Department said Friday that U.S. retail sales rose 1.1 percent in September from a month earlier. Sales growth during August was revised upward to 0.3 percent.
While strong earnings for the software sector are expected through this earnings season, overall investor confidence will likely depend more on an optimistic resolution to the E.U. meeting.
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