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Is the PC market in terminal decline?

Daily Ticker

Global shipments of PCs fell 6.9% to 82.6 million units in the fourth quarter of 2013, down from 88.7 million units in the same quarter of 2012. Last quarter was the seventh consecutive quarter of shipment decline and the worst quarter in history for the PC market, according to technology research firm Gartner.

Lenovo was the top-selling PC maker in the fourth quarter, accounting for 18.1% of global PC shipments. Hewlett-Packard (HPQ) controlled 16.4% of the market last quarter, followed by Dell (11.8%), Acer Group (7.8%) and ASUS (6.5%). PC shipments in the U.S. totaled 15.8 milllion in Q4 2013, a 7.5% drop from Q4 2012.

Mikako Kitagawa, an analyst at Gartner, says the downward trend in PC sales will reverse in future quarters.

"Although PC shipments continued to decline in the worldwide market in the fourth quarter, we increasingly believe markets, such as the U.S., have bottomed out as the adjustment to the installed base slows," she said. "Strong growth in tablets continued to negatively impact PC growth in emerging markets. In emerging markets, the first connected device for consumers is most likely a smartphone, and their first computing device is a tablet. As a result, the adoption of PCs in emerging markets will be slower as consumers skip PCs for tablets."

Related: Is Microsoft a sinking ship without a captain?

The Daily Ticker's Henry Blodget agrees that tablets have hurt sales of PCs and the market has become more segmented.

"But if you look at the market in totality, it's going gangbusters from desktops to tablets to laptops to phablets," he says. "Devices are exploding. The PC is in trouble because other devices are taking over and they're lasting longer."

Apple (AAPL) on the other hand reported strong computer sales last quarter, with U.S. sales of Macs rising 28.5% in Q4 from a year ago. Apple now commands 13.7% of the domestic computer market, up from 9.9% in 2012. Forrester Research estimates Apple will sell $8 billion dollars worth of Macs and $13 billion dollars worth of iPads in 2014. Mac corporate sales will also increase substantially over the coming year, notes Forrester.

Related: Google robots, iPhone trackers – which sci-fi movie is coming true?

Watch the video to hear what Henry and Aaron Task have to say about Microsoft's future -- will the staid software developer reinvent itself like IBM?

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