The PC Desktop is Dead, Long Live Apple’s Post-PC World
by Ryan Cole, Investment U Research
Monday, March 14, 2011
We’re living in a post-PC world. So says Apple (Nasdaq: AAPL).
While computers aren’t about to disappear, their market share is shrinking.
Technology forecasting firm IDC predicts that sales of smartphones and tablets will outpace PCs in just over a year. And fellow research firm Gartner thinks it will happen even sooner. In fact, after seeing the explosive growth of tablets and the slowing of PC sales, Gartner shaved one-third off its projected PC growth for next year.
Say Goodbye to Your Desktop PC
Laptop sales have tripled over the past four years, as prices fall and mobility becomes more desirable. Desktop sales, on the other hand, have remained flat.
That means the onus now is on diversification.
For example, Hewlett-Packard (NYSE: HPQ) is the largest computer manufacturer in the world. But it also has a significant presence in everything from laptops to phones. And its new tablet will probably stay in the top ten or even top five for the year.
Meanwhile, Apple owns a significant portion of the smartphone market and dominates the tablet market. And while it only claims fourth-place in the computer market share rankings, it boasts a surprisingly robust laptop business.
In fact, when it comes to premium laptops – those over $1,000, which are the best desktop replacements – Apple is the biggest player in the market.
So Apple won’t only be fine… it will continue to thrive as desktops fade.
But one company might encounter some trouble ahead.
Dude, You Don’t Need a Dell…
Dell (Nasdaq: DELL) has a smartphone, but it isn’t very popular. It also wants to get into the tablet market, but so far hasn’t made any inroads.
And although it’s the third-largest PC manufacturer in the world, Dell isn’t nearly as strong when it comes to laptops. In fact, its share of the notebook market has declined from 18% in 2005 to just 12% in 2009.
Dell needs a hit product in some hot sector of portable technology, or it will merely tread water.
It should be fine in the short-term and could even surprise analysts, many of whom have passed harsh judgment on it in recent months. But long-term, Dell is facing trouble.
Keep an eye out and adjust your portfolio accordingly.
Good investing,
Ryan Cole
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One Response to “The PC Desktop is Dead, Long Live Apple’s Post-PC World”
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Desktops are still popular for gaming and people who need to do a lot of work but we would agree that laptops and more recently netbooks / tablets have been eating into their market share.
However we are not convinced that tablets will ultimately be any more of a game changer than netbooks were meant to be when they were the next big thing.
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