UPDATE: Samsung has denied a report that says it is shutting down its PC business and provided the following statement:

The rumor that Samsung is withdrawing from the PC desktop business is groundless. Samsung will continue to offer diverse PC products according to consumer and market needs.

Samsung is reportedly shuttering its desktop PC business amid declining demand, a Korea Times report says, likely marking a move toward consolidation for OEMs as companies specialize in either manufacturing traditional computing models or handheld devices.

The report cites a Samsung official as saying that the company will divert its resources to “popular” connected and portable devices, boosting research teams and technology development units for tablets and all-in-one laptops.

This follows the news that the Korean government had recently designated the desktop PC business as as an “industry suitable for smaller firms” from 2015, the report says.

Samsung’s move might be perceived as an embarrassing about-turn as it comes hot on the heels of the launch of its Ativ One 5 Style PC last week, an all-in-one touch-screen PC modeled after the company’s Galaxy tablet range.

However, it isn’t surprising at all given that research has been showing bad news for the PC industry. In Q1 2013, PC shipments hit a new low, posting the steepest decline ever seen to date, according to IDC. Worldwide, a total of 76.3 million PC units shipped in the first quarter of 2013, down 13.9 percent compared to the same quarter in 2012. At the same time, IDC said the tablet market grew 142.5 percent year-on-year in Q1 2013 (up from 20.3 million units in Q1 2012), with Samsung growing its share in the tablet industry to 17.9 percent.

Mary Meeker also recently released her 2013 Trends Report, which says tablet shipments have surpassed desktops and laptops in just three years.

Other manufacturers seem to be comfortable swooping in on the desktop industry which has fallen out of favor, which would likely indicate specialization taking place. Taiwanese firm ASUS recently released four new desktop PCs powered by Intel’s “Haswell” chips, while Chinese firm Lenovo has a whole range of desktops – the “Essential” desktop line meant for budget-conscious consumers, the “ThinkCentre” line aimed at business users, and the “IdeaCentre” line primarily for entertainment.

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