Kiss Your PC Goodbye
Your desktop -- and maybe even the shiny new laptop that you bought a few months ago -- are dinosaurs.
There's been plenty of evidence suggesting that folks aren't warming up to PCs anymore. The "good enough" computing revolution that has nudged consumers-on-the-go toward smartphones and tablets is taking its toll on the box business.
We saw it on Tuesday when Dell (DELL) reported a 14% drop in PC revenue. It was confirmed a day later when Hewlett-Packard (HPQ) followed up with a 10% dip in PC sales.
Excuses, Excuses
Box bulls will argue that the global slump in PC sales is tied to the soft economies around the world. Once things start to turn around, companies will begin ordering more PCs.
Don't bet on it, investors.
If the global economic malaise is the scapegoat, why are smartphones and tablets selling so well?
Another excuse for the industry's slide is that potential buyers are waiting for Microsoft (MSFT) to push out Windows 8. The buzz is strong on the new operating system, and traditionally PC sales spike when a new version of Windows hits the market.
Well, don't bet on that either.
What makes Windows 8 so special is that it's Microsoft's first platform developed with tablets and other touchscreen devices in mind. Even Microsoft is jumping into the tablet fray, planning to introduce Surface tablets later this year running on two different Windows 8 platforms.
Bye Bye, Ol' Ball and Chain
Obviously, the PC isn't going away overnight.
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There are still plenty of people who prefer the larger displays available on laptops and especially desktops. There's also the sheer computing power that hardcore computing enthusiasts, professionals, and diehard gamers crave, which can't be satisfied by a tablet saddled with a Bluetooth keyboard cover.
However, a lot of people who do own PCs are just using them to surf the Web, check e-mail, and fire off the occasional letter. For these casual users it doesn't make a lot of sense to be anchored down by a desktop or to lug around a laptop when new smartphones and tablets can do all that with the convenience of portability.
The trend will continue, and that's bad news for both Dell and HP.
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Motley Fool contributor Rick Munarriz does not own shares in any of the stocks in this article. The Motley Fool owns shares of Microsoft. Motley Fool newsletter services have recommended buying shares of Microsoft. Motley Fool newsletter services have recommended creating a synthetic covered call position in Microsoft.
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