Tech Stocks Beware: PCs Almost a Thing of the Past

Tech Stocks BewareThe verdict is in, and it doesn’t look good for the personal computer (PC) market. But again, this should not be a surprise, as I have been saying for quite some time that the demand for PCs is on the decline, and I wouldn’t bet on a reversal anytime soon. (See “Tablet Market Gaining Altitude.”)

Think about it. Do you actually own a PC at home? If you do, as I do, it’s probably a few years old and was manufactured before the advent of the tablet.

Sales of PCs in the U.S. fell 11% year-over-year in the second quarter, according to International Data Corporation (IDC). Based on research by Gartner, Inc., the decline was reported to be six percent, but this figure was based on sales of PCs and laptops. On a global basis, PC shipments contracted a mere 0.1% year-over-year, but the Gartner research showed it was the seventh straight month of declines or only slight increases. My stock analysis: PC makers beware.

The sales results indicate a PC market that remains in a death-lock that even Houdini may have found impossible to escape.

Top PC makers, such as Hewlett-Packard Company (NYSE/HPQ) and Dell Inc. (NASDAQ/DELL), are hurting, based on my stock analysis.

Again, based on my stock analysis, you can blame the hurting PC market on the superlative rise in tablets.

The global market for tablets is estimated to rise to around $31.9 billion this year with over 100 million units delivered, according to Visiongain. By 2016, it’s estimated that about 360 million tablets will be sold, according to IHS iSuppli.

I believe poor decision-making by management at both Hewlett-Packard and Dell is to blame for the companies’ poor results.

Hewlett-Packard had been in the tablet market but exited, fearing market leader Apple Inc. (NASDAQ/AAPL) had a stranglehold on it. Dell continues to produce tablets, along with a hybrid ultrabook that can also work as a tablet when you flip the screen around. In my stock analysis, the idea is gimmicky and will pose no challenge for the market leader.

Apple has no fear.

The reality is that users want tablets, not hybrids or smaller-sized laptops. The PC makers are beginning to understand this, but at this stage, it will be very difficult to change their course of direction and catch Apple, according to my market analysis. The same thing happened to Blockbuster after the company failed to adapt to the shift to DVD rentals via mail and ultimately online streaming, which then-upstart Netflix, Inc. (NASDAQ/NFLX) recognized in 2002.

Based on my stock analysis, I believe the failure of the PC makers to recognize the industry’s shift to tablets as an extension of the smartphone was a fatal mistake that companies, such as Dell and Hewlett-Packard, are paying for now.

And to make matters worse, the adoption of the tablet will likely intensify, according to my stock analysis.

Microsoft Corporation (NASDAQ/MSFT) recently announced it was entering the hardware business via its upcoming “Surface” tablet, running on the next version of the “Windows 8” operating system. What’s interesting is that the new platform and associated applications will be able to operate in a wide variety of environments, including PCs, laptops, and, yes, tablets., Inc. (NASDAQ/AMZN) is speculated to be on the verge of working on a possible tablet that will offer much more functionality than its “Kindle Fire.”

Tablets are advancing in technology and more powerful applications, which will further erode the demand for PCs and laptops, based on my stock analysis.

  • Marc Roussel

    This article is totally wrong.

  • Sammie332141245

    lol. Try running adobe products on a tablet. When that happens I will believe this article until then, toys will not replace tools.

  • Rhys

    Absolute nonsense! What total drivel. "According to my analysis" yes indeed and according to mine you need to find yourself a job you are more suited to – your skills as a journalist are shi t.

  • Alex Sabbo

    This is right up there with the 1982 analysis that "in 10 years electronic music will have taken over the market". 30 years later many of us still prefer real instruments to samples.

  • Andrew Currie

    Call me when your tablet can run Photoshop, Fall of Cybertron, internet browser, Skype, and Minecraft at the same time, then we'll talk about the death of the PC.

  • Andy

    To the uninformed, many would suggest "tablets are taking over PC's". Highly false as many computer enthusiast would know. Home computers would still be used for professional work and for power users. Tablets are more convenient when you just want to "check" some data or information. Proper "work" is not possible without a keyboard or mouse.

  • Jonathan

    Right about Sammie and others. Tablets are not good for working, they're not even as good as PCs with basic things like reading email or using an office suite. They're for entertainment, and that will have an impact on some PC users, but not that big really.

  • CharlesCurmudgeon

    Sorry, you missed completely the point of sharing on the cloud, or iCloud, as the place where Terabits (TB) will be stored, while local GB only needed for local TEMPORARY storage. With miniaturization continuing and Flash drives expanding, it won't be long before both will provide LOCAL temporary TB.

  • breckandy

    I need a real keyboard, not a touchscreen

Sponsored Web Content