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 (HPQ 1.96%) 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 (MSFT 1.18%) 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 (BB -0.69%) 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 (FTNT -0.61%) 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