The U.S. Gets Hit Again: We're No Longer the World's Top PC Market

New data from research firm IDC says that the United States is no longer the top market for computer sales. China and its more than 1 billion people lead in PC purchasing. Call it just another hit to an economy that's already taken far too many.

Manufacturers shipped 18.5 million units worth $11.9 billion in sales to China in the second quarter. U.S. buyers spent $11.7 billion for 17.7 million computers over the same period, according to IDC.

Surprised? You shouldn't be. Not long ago analysts downgraded Intel (Nasdaq: INTC  ) because of slackening PC demand. The chip maker is a top provider of processors to domestic computer makers, including Dell (Nasdaq: DELL  ) and Hewlett-Packard (NYSE: HPQ  ) , which just announced plan to exit the PC business.

China, meanwhile, is growing even as the U.S. struggles to fix its debt problems. Gross domestic product is on track to expand 9% this year and 7% over the long term -- and that's despite a serious battle with inflation that remains ongoing.

Does this mean U.S. tech dominance is at risk? Over the long term, possibly. For now, holiday shopping here should lift the U.S. back into the top slot for all of 2011, IDC says. Next year, the trend may reverse again -- perhaps for good.

As investors, that means it's time to start looking at the top brands in the region, including Lenovo and HTC. Or better yet, Apple (Nasdaq: AAPL  ) , which saw Asia Pacific revenue rise 727% from 2005-2010 and generated 18% of last year's profit from sales in the region.

Or another bet could be NVIDIA (Nasdaq: NVDA  ) . On their recent conference call, the company pointed to strength in China. Graphics card attach rates in the country sit at 80% while that number is mired in the 20s on stateside computers.

Do you agree? Disagree? Weigh in using the comments box below. And if you're in the mood for ideas for how to profit from the shift away from PCs, try this free report. In it, our analysts take an in-depth look at a company poised to reap a windfall from the rise of mobile computing. Click here to get your copy now -- it's 100% free.

Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team. He owned shares of Apple at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Google+ or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.

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, Dell, and Intel. Motley Fool newsletter services have also recommended creating a diagonal call position in Intel, as well as a bull call spread position in Apple. 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.


Read/Post Comments (4) | Recommend This Article (1)

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 August 24, 2011, at 6:52 PM, websterphreaky wrote:

    Scoop you! Stevie Gods just resigned as CEO of CrApple..... watch for the Stock Plunge tomorrow!

  • Report this Comment On August 24, 2011, at 6:58 PM, jhf678 wrote:

    Intel should purchase Nvidia now to gain back the US market and go after China market.

  • Report this Comment On August 24, 2011, at 11:09 PM, Bob1m wrote:

    I believe more than half of Intel's revenue came from activity in China. Is that correct? If so, is INTC a good investment - the current dividend rate is 4.30%?

  • Report this Comment On August 25, 2011, at 9:28 AM, lucasmonger wrote:

    To websterphreaky, markets opened, no plunge yet. Not quite sure why you dislike apple so much, but their stock performance and their sales numbers from redefining the technology sector are indisputable.

    Apple has been running without steve off and on for quite some time now... I think the Market is confident that the AAPL (at least in the short term) is running just fine. Now if the new CEO starts to pull an HP (fire your CEO, buy a losing company, bank your whole future on it, then change directions without seeing it through) or a Microsoft (wait for someone else to innovate, then scramble to copy it), or a Nokia/Blackberry/Motorola (rest on your past laurels and completely miss the future) or any other signs that the train has derailed, then maybe then you can expect a big drop.

    I think most of us fools are looking for long term solid investments, not these short term changes chasing news.

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