The end of the PC era
byFeb 19th 2009 8:00AM
Most analysts could have predicted that HP's (HPQ) PC and printer sales would be down for its last reported quarter. Research firms say that the number of PCs being sold has been dropping quickly both inside and outside the U.S. The news has driven Dell's (DELL) shares close to new lows.
Over the last few days, surveys of retailers show that even the Apple (AAPL) Mac has not been immune. Its sales were off last month -- Macworld writes that the drop may have been as much as 6 percent.
Welcome to the end of the PC era. It is not just the recession that is causing the end to rapid growth of desktops and laptops.
Two factors are conspiring to hurt how well the PC industry can do going forward. The first is the rise of the smart phone. In some large countries like China, high-end phones are used like computers. Handsets, like the iPhone, have enough processing power and wireless 3G capacity so that they can be used to access the web, watch video, and send documents.
The other trend that has hurt PC upgrades is the evolving power of chips. New chips may be remarkably fast, but few consumers and businesses can take advantage of that. Chips that are a year or two old have enough processing power for all but the most avid gamers.
PC sales will not grow like they used to. Even when the recession is over.
Douglas A. McIntyre is an editor at 24/7 Wall St.