Apple's Killing Your PC

It isn't easy making a living in this country as a box seller, unless your name just happens to be Apple (Nasdaq: AAPL  ) .

Gartner published its PC sales metrics for the fourth quarter last night. The industry tracker estimates that 17.9 million computers were shipped during the holiday period, a 5.9% decline from last year. The category includes traditional PCs, laptops, and mini notebooks, excluding the tablets and smartphones that are selling briskly these days.

If you want to make an ugly number even uglier, back out Apple. Take away the more than 300,000 computers it sold this past quarter relative to last year and this country's non-Apple PC shipments fell by a staggering 8.6%.

Sales have been sluggish outside of Apple for more than a year, but Hewlett-Packard (NYSE: HPQ  ) and Dell (NYSE: DELL  ) are really struggling right now.

Let's take a look at the market share changes over the past year.

Company
2011 Q4 Market Share
2010 Q4 Market Share
Unit Growth
HP 23.1% 29.4% (26.1%)
Dell 22.4% 22.1% (4.5%)
Apple 11.6% 9.0% 20.7%
Toshiba 10.7% 10.3% (2.2%)
Acer 9.8% 10.4% (11.4%)

Source: Gartner.

Here are a couple of interesting nuggets from the data.

  • Dell and Toshiba may have gained market share, but it's a shrinking pie. Their total shipments actually declined.
  • Apple overtook laptop specialist Toshiba and Acer for the bronze this time.
  • Globally, the outlook is better, and Dell actually shipped out more PCs, but the global shipments still declined by a problematic 1.4%.

Gartner isn't optimistic about how things will play out in the near term. Floods in Thailand have resulted in a hard-disk-drive shortage that will limit the industry's shipments through at least the first half of this year.

This may all seem like gloomy news for Microsoft (Nasdaq: MSFT  ) and accessory maker Logitech (Nasdaq: LOGI  ) , but it's also quite possible that PC buyers have been holding back on Microsoft-powered machines until Windows 8 rolls out later this year. Once the new systems hit, Logitech will likely be back selling more third-party keyboards and optical mouse controllers, and Mr. Softy should be raking in its high-margin operating system revenue.

HP and Dell better hope that's the case. Apple keeps closing in with every passing quarter.

If you haven't read about the two words that are giving Bill Gates and Steve Ballmer fits, it's a free report, so you as may well check it out now.

The Motley Fool owns shares of Microsoft, Apple, and Logitech International. Motley Fool newsletter services have recommended buying shares of Dell, Apple, Microsoft, and Logitech International. Motley Fool newsletter services have also recommended creating bull call spread positions in Apple and Microsoft. 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 calls them as he sees them. He does not own shares in any of the stocks in this story, except for HP. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.


Read/Post Comments (12) | Recommend This Article (6)

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 January 12, 2012, at 10:51 AM, H3D wrote:

    And that is if you ignore tablet computers.

    Include them and let's see how the mumbers look.

  • Report this Comment On January 12, 2012, at 11:02 AM, spew16 wrote:

    Here is another interesting nugget from the data: 88.4 percent of personal computers shipped last quarter WERE NOT APPLE ! Perhaps it is because they are overpriced elitist gadgets for consumers of entertainment. Now get back to work on your company issued PC hooked to an Intel based server.

  • Report this Comment On January 12, 2012, at 11:51 AM, Melci wrote:

    @H3D

    If you include the iPad in these PC numbers as Microsoft, Canalys, DisplaySearch and Barron's do, Apple probably would have been the #1 PC vendor worldwide with around 15 million Macs and iPads sold in Q4 2011.

    To call the iPad a "media tablet" and ignore it (as Gartner does) in these figures when it runs spreadsheets, databases, word processing, DTP, video editing, painting, graphics, email, web browsing etc just as easily as it can play "media" is pretty feeble.

  • Report this Comment On January 12, 2012, at 12:01 PM, Brent2223 wrote:

    Business is always a late adaptor. On the personal side, PC's are dead. 2 year olds are picking up iPhones and iPads - they will grow up not knowing what a mouse or keyboard is. Once they hit school and work age that'll force the corporate world to change. If I start a job and they plop a typewriter in front of me I'd laugh and quit on the spot. Why do you think business is starting to look at supporting iPhones? They don't want to, but they need to because that is what employees want. If they don't change they'll have major issues attracting young fresh talent.

  • Report this Comment On January 12, 2012, at 12:16 PM, aagramonte wrote:

    total PC units sold in 2011 352.8 million out of that 16 to 17 million were Macs.

    LENOVO grew 40% in the USA and 19% worldwide - they are the real story in that report.

  • Report this Comment On January 12, 2012, at 1:06 PM, ConstableOdo wrote:

    It's certainly true that Wintel PCs are the market leaders in computing. Apple is gaining only a small amount of ground, but that small amount is very profitable for Apple. Consumers do like Apple products and they have high satisfaction rates. Apple is continually selling more products and will likely never reach Wintel PC numbers. Apple is one company and is doing very well. Even Microsoft, on the other hand, will report lower earnings this quarter and may have only half the revenue of Apple this quarter. Apple is on the rise, Microsoft is on the wane.

  • Report this Comment On January 12, 2012, at 1:19 PM, roontooner wrote:

    @spew16

    I would have to say that your username says it all. If you are in fact an investor you wouldn't give a damn if any product is elitist or not. All you would care about is if the stock price is going up. Now I assume you know how to read a chart, but I may be wrong so have a look at this one and let us know who the fool is on fool.com http://bit.ly/z7pJ2G

  • Report this Comment On January 12, 2012, at 1:41 PM, CraigNotGreg wrote:

    @ConstableOdo

    Unless you are focusing on Microsoft revenue/earnings, there is no point in lumping all Wintel PC manfacturers together and calling them market leaders. They are not all on the same "PC team". HP competes with Dell, Toshiba, and Acer just as it does with Apple. Apple will never reach Wintel numbers, just as none of the aforementioned Windows-based manufacturers could reach 90% market share individually.

  • Report this Comment On January 12, 2012, at 9:30 PM, Melci wrote:

    With only 5% unit sales marketshare, Apple captured around 38% profitshare of the entire PC industry a year or two back according to Deutsche Bank.

    From an investor's point of view, with Apple's greatly increased unit marketshare in recent times, one has to wonder what Apple's industry profitshare is like now?

  • Report this Comment On January 12, 2012, at 11:23 PM, NkZ wrote:

    Apple does not have 5% it's has 11.6 percent and makes like 50% of Reuvene

    And lenovo isn't on the list it's like 9th percent

    And also apple have 95% of all computers priced 999 and upwards so it's own all workstations, desktops, and all proffesional computers all servers are run on a Mac pro and it owns all of ultra books sales 75 percent of tablets 23 percent of all phones and if you do ios vs android iOS is winning by 100 million units and compare samsung to apple Samsung is the main android guy with 130 handsets and it has 10 percent vs apple iPhone at 23 percent and apple makes 60 percent of mobile handsets and 5 sales of all mobile products tablets phones etc count iOS they winning and there about to capture 90 percent of the tv market so apple is still the biggest company most money twice as much google and google stock is decreasing

  • Report this Comment On January 13, 2012, at 2:07 AM, Melci wrote:

    @NkZ,

    Not disagreeing with you, but you misread my comment. I said Apple had 5% marketshare and 38% profitshare of the PC industry *several years ago*.

    I was pointing out it would be far higher now.

    I believe the 50% profitshare you are referring to is of the entire cellphone industry. If you have seen a recent estimate of Apple's profitshare of the PC industry, I'd be interested to see the report.

  • Report this Comment On February 02, 2012, at 9:27 PM, MHedgeFundTrader wrote:

    Apple has become a monster cash flow generator. Apple now has the envious problem in that sales of several of its products are going hyperbolic at the same time.

    Apple announced net profits of $13.06 billion, or $13.87 per share, up 11% from the previous year. If the company just maintains that rate for the rest of the year, it will generate $55.48 in earnings, which at the current 11.5 multiple should take the stock up to $638, up 40%. If Apple makes it up to a market multiple, the stock should rise to $721, a gain from here of 58%.

    If the multiple expands to its pre-crash average of 35 X, that would take the stock to a positively nose bleeding $1,941, giving you a 424% return from current levels. Then the company would be worth $2.8 trillion and rank 5th in the world in GDP, more than France, and just behind Germany. Wow!

    It all reinforces my view that Apple shares will reach my long term target of $1,000 sooner than anyone thinks. Long term readers are well aware that I have been making this call for the past two years back when it was trading at a lowly $240. More recent subscribers will also recall that I predicted that Apple would be the top performing technology stock in my 2012 Annual Asset Class Review.

    I'm not saying that you should rush out and load up on stock today. But it might be worth taking a stake on the next wave of fear that strikes the market.

    The Mad Hedge Fund Trader

Add your comment.

DocumentId: 1756995, ~/Articles/ArticleHandler.aspx, 4/19/2014 9:11:09 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement