Think about it. For years we have been buoyed by the endless demand for cellphones and personal computers. We could always count on billions and billions sold to replace older, less powerful machines and to meet demand from the lesser developed countries.
Demand is still out there, and billions and billions of devices are actually still being sold. But the trajectory has gone from fast growth to slow growth to no growth and now, in many cases, to year-over-year declines.
Plus, the iterations -- desktops, laptops, notebooks, net books and ultrabooks -- just aren't selling all that well -- certainly not well enough to risk a seasonal bounce.
For years we could always count on some new product cycle. For example, Intel (INTC) would come out with a more powerful chip or Microsoft (MSFT) would release an important upgrade. Sure enough, we are getting one from Microsoft -- but have you ever seen less enthusiasm for a new cycle, especially when those of us who have tried it find it very exciting? I smell a secular decline, not a cyclical one, and it is being hastened by the $700-billion behemoth that is Apple (AAPL - Get Report).The amazing thing is that we know that Apple is a small part of this personal computer market. But it's almost as if the better mousetraps abound and the marginal purchase of a laptop or desktop is going to Apple and the tablet market, which is on fire, seems like a replacement for the entire industry. Now that Apple is about to ship the new and powerful iPhone 5, I am sure that many will simply stop carrying personal computer (PCs) and go for a two-device world. And neither device is made by Dell (DELL) or Hewlett-Packard (HPQ) -- and neither has Intel or Microsoft in them. Dell's got a 3% yield. Any takers? Not with a lineup that sells machines into Europe and government and has tried to build out enterprise hardware and software and yet keeps disappointing. Hewlett-Packard? I don't know what to say. It can't seem to reinvent itself, it doesn't have a tablet, and its machines are almost all commodity. It has huge sales but not a lot of value.