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The 'Return' of the PC

NEW YORK (TheStreet) -- A gloomy outlook has darkened the desktop computer industry for years after consumers switched first to laptops and now tablets.

In the past three months, several news sites including Forbes, Fox Business and Salon reported the personal computer, or PC, is dying or dead.

Then, this week, Apple (AAPL) shocked many by reaffirming its commitment to desktops. That's right: A new Mac Pro desktop with a radical new design is coming "later this year."

Could Apple magic lead a desktop revolution?

"Wow, this is a seriously sexy and powerful little unit," wrote MacNewsWorld.com. "...It shows that the company still takes the Mac and its product design seriously," declared MacWorld.com. "Apple's new machine is long overdue and maybe now the competition will finally step up," proclaimed PCMag.com.

But for those in the know, desktop PCs have always continued to sell, a lot --just not as many as newer technologies.

Market researcher IDC just revised its projection downward, but it still expects 134.4 million desktop PCs will be sold this year. By comparison, the company projected 187.4 million laptops, 229.3 million tablets and 958.8 million smartphones also will ship this year. Mercury Research, a firm that tracks PC components sales, estimates 34.8 million desktops sold during the first three months this year. And that was a rough quarter, falling 18% from a year ago, said Dean McCarron, Mercury's president and principal analyst.

"Those are near record-setting declines, which is where the doom and gloom comes from," McCarron said. "But even with this decline, the overall market remains larger than it was at any time prior to the 2008 financial crises. The desktop market today is on par with its size in 2007."

Surprised? A good number of people who need desktops are video and sound editors and folks handling 3-D graphics and processor-intensive files. There are also a number of hardware enthusiasts, do-it-yourselfers and gamers willing to spend a small fortune for a high-performing desktop -- or the components -- to push technology to the limits.

A recent bright spot for the consumer desktop industry are all-in-one computers, which include a built-in monitor. That segment grew 25% last year over the previous year, according to Intel (INTC) All-in-ones are becoming the family computer that stays in one spot and everyone in the house shares. Mercury Research said these consumer-friendly PCs accounted for 27% of computers sold during the fourth quarter of last year in a market that was essentially zero just a few years ago.

Other desktops gaining an audience are small boxes like Apple's Mac Mini that may as well be portable because of their diminutive size. They tend to serve as media centers for the living room TV. Intel calls the segment NUCs, short for Next Unit of Computing.

Intel focuses more on mobile PC chips and products today, like ultra-light notebooks such as the MacBook Air. But during the big debut of Intel's fourth-generation Core chips last week, the two dozen new computer chip models based on the new "Haswell" chip were evenly split between desktops and laptops, said Dan Snyder, an Intel spokesman.

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