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The PC Is Still Dead Here

Globally speaking, the computer isn't going down without a fight.

Industry tracker IDC is reporting that worldwide PC shipments came through with a 2.6% year-over-year gain during the second quarter, reversing the shocking 3.2% slide during the first three months of the year. The previous quarter's dip was the first year-over-year decline since the end of the recession, leading some to wonder if the economy was going to fall back into a hole, or if this was simply part of the larger trend away from desktops and laptops.

The news isn't all good, though. PC shipments in this country remain in the red, as strong gains by Apple (Nasdaq: AAPL  ) and Toshiba failed to offset declines from market leaders Hewlett-Packard (NYSE: HPQ  ) and Dell (Nasdaq: DELL  ) .


U.S. Market Share

Annual Growth



















Source: IDC.

PC shipments in the U.S. fell 4.2% during the quarter. This isn't as bad as the jaw-dropping 10.7% plunge during the first quarter, but the trend remains problematic.

Are we demanding fewer PCs because Corporate America and consumers just can't afford them, or is "good-enough computing" through ever-more-popular smartphones and tablets replacing our need for bigger gadgetry?

There may not be an overwhelming sense of panic since many of the box makers have also thrown their weight behind tablets and smartphones. Many of the companies behind the guts that make up PCs -- including NVIDIA (Nasdaq: NVDA  ) and Intel (Nasdaq: INTC  ) , which took a hit three months ago during the earlier IDC report -- have been positioning themselves to matter in the smaller computing devices folks are actually buying these days.

There are some bragging rights in the carnage. By suffering just a negligible decline, HP actually gained market share. The industry may also want to paint this as a company-specific problem, since Acer's year-over-year difference of 515,000 units in the U.S. would seem to account for most of the 775,000 net decline in units. Take Dell and Acer out of the mix and PC shipments in the U.S. would have inched 1% higher!

However, we have to be realists here. Emerging countries and hotter economies abroad may not be ready to let the PC go, but a real shift is taking place in this country. Pocket-sized computing is the future, and every passing quarter will probably bear that out.   

Will PC shipments bounce back in this country? Share your thoughts in the comment box below.

The Motley Fool owns shares of Apple. The Fool owns shares of and has bought calls on Intel. Motley Fool newsletter services have recommended buying shares of Apple, NVIDIA, and Intel. They have also recommended creating a bull call spread position in Apple and a diagonal call position in Intel, as well as writing puts in NVIDIA. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Longtime Fool contributor Rick Munarriz pecked away this article on an HP computer, but he does not own shares in any of the companies in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.

Read/Post Comments (10) | Recommend This Article (4)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On July 14, 2011, at 3:08 PM, Spssguy wrote:

    Uh, hello? The news here is that Apple continues to have double-digit GROWTH in the midst of a DECLINE in this segment.

    And that is NOT EVEN COUNTING IPADS. Gartner and IPD would not ALLOW for that, their Microsoft partners would surely object.

  • Report this Comment On July 14, 2011, at 3:10 PM, Spssguy wrote:

    Of course IPD and Gartner BOTH INCLUDE the 'netbooks' which have been the only bright spot in US computer sales for years now, but they IGNORE the iPad (which is literally KILLING the 'netbook).

    But, they are starting to acknowledge this, and it's not too difficult to add the iPad in and see that Apple is in FIRST PLACE even if you didn't consider that they have virtually ALL of the high end sales, and have for 2-3 years or so.

  • Report this Comment On July 14, 2011, at 3:11 PM, Spssguy wrote:

    *** US _PC_ Sales that is. Mac is the bright spot in US computer sales.

  • Report this Comment On July 14, 2011, at 3:20 PM, TheDumbMoney wrote:

    SPssguy si dead on, as I have said many times. No analysis of what is happening to "PCs" is meaningful in any way whatsoever unless you separate our netbooks from real PCs. Netbooks were only created a few years ago, and were the "good enough" computers that tablets have definitely supplanted. One cannot know what is happening to PCs more generally unless one parses the numbers. This distinction matters. At the root of this distinction is whether laptops and desktops go the way of the dodo or whether an merely a a subcategory of them does.

    In that regard, look at WHO THE NUMBER ONE NETBOOK VENDER WAS: -------DRUMROLL....ACER.

  • Report this Comment On July 14, 2011, at 3:22 PM, jhf678 wrote:


  • Report this Comment On July 14, 2011, at 3:34 PM, DeadaimSr wrote:

    The new generation will change the name of the game. The current trend is from desktops to portable/mobile devices such as the notebook and tablets and it's growing demand for powerful portable/handheld/mobile device processing chips for smartphones and tablets. The new generation will be using handheld as their primary computers. Handheld devices with docking stations. Now, think of your phone as your primary work/school computer? Think of the demand for this device? It'snot only in the US, it's worldwide. All people can finally afford a computer since handheld will be cheaper than PC's. The processor for this technology is already already here. The Tegra 3 chip is already available and most competitiors are marketing and saying they can compete with Tegra 3's potential. This validates the likelyhood that the handheld device market is still in it's enfancy stage. The smartphone or tablet device that can partner with Tegra 3 will surely get the monster share of the market. Tegra 3 has taken off and it's not yet reach it's potential. Once a smartphone or a tablet device matches that potential the landscape of computer market will change forever.

  • Report this Comment On July 14, 2011, at 4:50 PM, techy46 wrote:

    I can't wait for the "new" generation to walk into the enterprise and tell the CFO that they won't use that old PC as their SAP client attached to the old Oracle or SQl server database. Maybe the new generation won't even get an interview for the job since they can't use a keyboard. Thta's Ok, there's plenty of jobs at JC Penny's and Macy's for the new generation. Those that want to develope enterprise cloud application migh want to learn to use Microsoft's IDE.

  • Report this Comment On July 15, 2011, at 10:53 AM, DeadaimSr wrote:

    tech46 : we will still use the keyboard hahahah! thats where the docking station come in right? ...The technology is here...Google's Android Honeycomb by Quanta tablet with Tegra chip, Hollywood tablet powered by Tegra or quad-core "Kal-El" , Amazon-designed tablet that will have Kal-El processor advanced version of Android.....30 years ago computers were as big as cabinets, then my parents though it was the best thing since slice bread. My dad used to tell me how excited they were about computers with 32MB memories..they didnt know what to do with it. When I told him 10 yrs or so ago about 1gig computers he look at me like I was on we have handhelds that are more powerful than the computers a decade just saying...hahaha!

  • Report this Comment On July 15, 2011, at 12:50 PM, daustin97222 wrote:

    Recognizing the switch to SFF mobile is happening ...

    But I posit a couple of thoughts.

    1. Population is aging. Rapidly. I am 56, and I cannot read what is on my phone until I switch glasses. If people want to read the news, maybe they can dock their Android and use the screen, I suppose. But for me: I will stick with the laptop (far more powerful) and the cell phone (complete with reading glasses). If you are under 40, then ask your Mom/Dad if they can read what's on your phone.

    2. Detail. Recently, I needed to locate a FLOW valve for my hot tub. Now, I could have called the repair guy, paid him $200 per hour and full price for the valve. Instead, I found the valve for fifty bucks on "the big auction site". How could I tell it was the right one? By blowing up the IPB for my 10 year old tub, comparing pictures, and then reverse-matching the part numbers. Try that on your phone. My 12 year old is about 20/15 so maybe he can do it on his 3DS screen. Not me. So I saved maybe $500-$700 on that repair alone. I have many other examples, including stock charts (try candlesticks on your 'droid and let me know how that works out)

    "am just saying" that none of us are getting any younger. Trust me: you will appreciate the screen (and the font).

  • Report this Comment On July 15, 2011, at 6:32 PM, jetamerica wrote:


    While you state "here" in your opening, it would jhave been helpful if you had addressed the fact that only about 20% of computer, 17.6 million of the total 84.4 million worldwide are sold "here". I wonder how many of the readers are aware of that. Further research might indicate that the dollar vaue of those US sales are less than 20% as international prices tend to be higher. Important to note that Lenovo now sells10.3 million units worldwide versus that US total of 17.6 million. All investors need to think globally when they allocate their investments and to be aware of those markets. This year more vehicles were sold in China than the USA, albeit at lower prices. Itis likely in th enext few years they will also outsell the US in computers

    I do agree that tablets, which can replace some nore books do need to be included in the total-but disagree on smartphones

    Let's think globally folks-those overseas sales are what power much of US industry revenues and profits

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