The PC Is Dead, and These 2 Stocks May Be, Too

The Dow Jones Industrial Average blithely continues its inexorable climb, rising 63 points, and hitting a new high yet again, even as the PC industry let out a shuddering gasp with its last dying breath.

What held the index back from notching an even better gain was the flop of Hewlett-Packard's (NYSE: HPQ  ) stock, falling 6.5% after market researchers at IDC said that computer sales had their worst drop ever, as first-quarter computer shipments plunged 14%, to just 76.3 million units. Microsoft (NASDAQ: MSFT  ) wasn't far behind, tumbling 4% as its Windows 8 OS was charged with helping to push the PC off the cliff. The operating system hasn't been well received and, rather than reinvigorating the market as everyone had hoped, it stalled it.

When the best computer maker (Lenovo) is the one experiencing 0% growth, you know there's a cancer spreading. H-P suffered the worst with a 24% decline in shipments, while Dell was down 11%.

With even older computers able to handle the demanding tasks asked of them, there's less reason to upgrade to new ones, even those sporting fancy new interfaces that people apparently don't care all that much about.

Clash of the titans
Similarly BlackBerry (NASDAQ: BBRY  ) may also be in its death throes, and it may have been served up the biggest insult of all: People aren't aware that its new phone and operating system even exist.

A recent survey suggested that 83% of respondents didn't know BlackBerry had launched its new BB10 OS, or that its new Z10 smartphone was on the market. That really shouldn't be surprising. When the phone was launched, AT&T barely gave it any support with marketing. Unlike when a new iPhone debuts, there was comparably negligible marketing going on, and the appeal of the new ecosystem was seen as centering on the corporate consumer.

What could be even worse for BlackBerry are the reports that returns for the Z10 are larger than its sales, at least at some retailers. That report might not give a full and complete picture of what's going on with the smartphone, but it does indicate there's a lot of trouble facing the company. With the Z10 and BB10 amounting to a Hail Mary pass to save the company from oblivion to begin with, it seems we may be seeing the last days of BlackBerry.

Is it safe?
Network and data-security expert Fortinet (NASDAQ: FTNT  ) also got a taste of what it means to come up short of expectations, as it pre-announced earnings that were well below analyst forecasts. It laid the blame on a handful of U.S. service providers, who failed to come through in closing deals, and noted that its telecom vertical market will amount to 25% of first-quarter revenue compared to 30% last year. Its stock plunged 13%, and dragged down much of the security sector with it, though by not nearly as much. Sourcefire was down less than 2%, Palo Alto Networks was down 1%, and Check Point Software was off less than 1%.

Because of the financial turmoil roiling Europe, Fortinet also experienced a heightened level of cautiousness among its international customer base, which could be a worrisome portent of things to come, because it derives almost three quarters of its revenues from outside the U.S. That's less of a concern for Sourcefire and Palo Alto, which generate 33% and 40% of their business overseas, respectively, though Check Point might be in for some ugly numbers, too, considering that more than half of its revenues are from outside the U.S.

Despite continually occurring security breaches, there's a go-slow mentality at work that suggests a global economic slowdown, and we probably haven't seen Fortinet or the other security specialists complete their run down just yet.

Ready for a resurrection

The massive wave of mobile computing has done much to unseat the major players in the PC market, including venerable technology names like Hewlett-Packard. However, HP's rapidly shifting its strategy under the new leadership of CEO Meg Whitman. But does this make HP one of the least-appreciated turnaround stories on the market, or is this a minor blip on its road to irrelevance? The Motley Fool's technology analyst details exactly what investors need to know about HP in our new premium research report. Just click here now to get your copy today.


Read/Post Comments (7) | 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 April 13, 2013, at 6:42 PM, MotleyDirtbags wrote:

    The writer of this article doesn't know what he is talking about, concerning BlackBerry, and he is unknowingly (I assume) spreading false information concerning the erroneous report of excessive returns of the Z10 smartphone. Verizon has issued a statement refuting the report that the author refers to, stating that returns are in line with other smart phones. BlackBerry has issued a similar statement and has said that they will pressing the SEC to investigate the analyst responsible.

    The writer should edit the article to reflect these facts, otherwise he is willfully spreading false information.

    As for 83% of people being unaware of the new phones and OS, all I can say is WooHooo!! That means only one out of six people are aware of it. When everyone knows about it, sales will increase sixfold. BlackBerry does not have the production capacity to satisfy the demand that an iphone or samsung product would have. Their rollout is slow and deliberate and is going as planned. Production capacity will increase in proportion to demand.

    Believe it or not, there are people who think that Motley Fool contributors are informed. They aren't. Anybody can write a trashy article for the Fools, even me. Don't pay attewntion to these trash sites .

  • Report this Comment On April 13, 2013, at 8:34 PM, Oril wrote:

    The only thing that is obvious is that motley fool is dead and lost all credibility. The fools that write this kind of garbage for them are just too stupid to roll over and die as well.

    lawsuits and litigation seems to be alive and well in the US, if the SEC doesn't respond Blackberry should go that route.

  • Report this Comment On April 13, 2013, at 9:43 PM, TimKnows wrote:

    InfoThatsSucksMeOff - and this website falls to the retarded.

  • Report this Comment On April 13, 2013, at 9:52 PM, armanifitch4 wrote:

    BLACKBERRY IS CRAP!!! SELL BBRY BUY NOKIA!!! This time next year Nokia will be at least $7

  • Report this Comment On April 13, 2013, at 11:49 PM, eidsonb wrote:

    Glad to see Infothatsucks is predictable

  • Report this Comment On April 14, 2013, at 5:54 AM, BigUncleHeavy wrote:

    "...the PC industry let out a shuddering gasp with its last dying breath."

    What an overblown and completely sensational line. The PC industry is dying? I've heard plenty of times how the "PC-This" and the "PC-That" is dead/dying, and I have never seen anything truely die, just evolve. I glazed over most of this article simply because anyone who is willing to write pointless trash like that probably doesn't have a very informed opinion on how then tech market really works.

  • Report this Comment On April 14, 2013, at 3:57 PM, TimKnows wrote:

    WOW, as InfoThatSucksMeOff said, BlackBerry has been bashed so much it must be a huge threat to the competition, well, dummy didn't say that, but it is safe to know that his garbage points you to that conclusion.

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