The Tech Twilight Zone: Tablets Are Falling and PCs Are Rising

By Michael Comeau  JUN 13, 2014 11:20 AM

Intel raised its second-quarter and full-year guidance on a rebound in PC demand.

 


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Tablets are weak [subscription required] and PCs are strong? Are we living in the Twilight Zone?

Yesterday after the close, Intel (NASDAQ:INTC) raised its second-quarter and full-year revenue, and gross margin guidance, "driven mostly by higher PC unit volume." Business PCs are seeing strong demand, echoing comments from [subscription required] Hewlett-Packard (NYSE:HPQ) a few weeks ago.


Could the Microsoft (NASDAQ:MSFT) Windows 8 cycle finally be here?

I doubt it. This is more likely PCs simply being worn out.

Here's a tabulation of recent global PC industry unit growth trends:



With essentially no real upgrade cycle since 2010 (the year the Apple (NASDAQ:AAPL) iPad began disrupting the traditional PC market), there are a lot of computers that need replacing.

This is good news for a wide variety of industry players up and down the supply chain -- everyone from Microsoft to H-P to Western Digital (NYSE:WDC) to Nvidia (NASDAQ:NVDA).

Ideally, we'll see a complementary bounce back in consumer PC demand during the back-to-school and/or holiday seasons.

If tablets have peaked in terms of taking share from traditional laptops, then they, too, could be long overdue for an upgrade cycle.

Twitter: @MichaelComeau

Position in AAPL

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