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Hewlett-Packard Company (HPQ) shares have taken a beating lately. Although major stock indices are up substantially year-to-date, with the S&P 500 index up 9% and the Nasdaq index up 14.7% as of 3/9/12, Hewlett-Packard shares are down 6.5%, currently trading at $24.18. During the past year, HPQ shares are down substantially more, having lost 42.8% of their value from $42.05 on 3/9/2011.

HPQ 5-Year Price Chart

Source: Yahoo Finance

Meanwhile, although Dell (DELL) shares are up 15.7% year-to-date closing at $16.93 as of 3/9/12, they are up a more modest 9.7% during the past year from $15.43 on 3/9/2011. As a matter of a fact, since the market sell-off in August 2008, Dell shares are still trading substantially below their range of about $20 to $25 where they were trading between April and August 2008.

Dell 5-Year Price Chart

Source: Yahoo Finance

There are several factors that have weighed down Dell, HPQ and other PC makers. However, while they have languished, Apple Inc. (AAPL) has flourished. While Apple's success was driven by many products, including its iPhone, the growth in its computers sales, including tablets, have undoubtedly eaten into Dell and HPQ's PC business. This has driven Apple's market capitalization to exceed half a trillion dollars, with its shares appreciating by as much as 34.6% year-to-date,and 54.7% during the past year to $545.17 as of 3/9/12.

Such divergence between three major players within the same domain is even more evident when we examine their comparative charts with Apple. In such charts, one can easily depict a horizontal parabola, juxtaposing Apple's fortunes to its competitors woes.

AAPL (red) vs. HPQ (blue) 5-Year Price Change (%) Chart
Source: Yahoo Finance

AAPL (red) vs. Dell (blue) 5-Year Price Change (%) Chart

Source: Yahoo Finance

During calendar Q4 2011, Apple sold more iPad tablets (15.4 Million) than any of its competitors sold PCs. Since 2003, Apple has sold as many as 55 Million iPads, with substantial momentum attributed to the latest quarter. With the current release of the latest iPad model on 3/7/2012, such momentum is expected to be maintained.

In addition, in its latest quarter, Apple has sold about 5.2 Million Mac computers (desktops and laptops), while it has sold over 42 Million units during the past 2 years. Apple's Mac sales growth exceeded 25.7% in its latest quarter year-over-year. According to Forbes, Excluding iPad tablets, Apple is now the fastest growing computer maker in the U.S., where HPQ's PC sales fell by 16.2% in its latest quarter.

With the current phenomenal growth in tablet computer sales, and expectations that Apple will continue to dominate such market, Apple has indeed eaten HP and Dell's lunch. Although Dell and HP are gearing up to put up a fight in the tablet arena, Apple will prove to be stiff competition, as discussed in our article published on 3/5/2012, "the art of tablet war."

According to to Gartner, excluding tablets, it is estimated that the PC market has actually shrunk by 1.4% in Q4 2011 vs. Q4 2010. If such contraction continues into the future, then could Apple soon be feasting on HP and Dell's dinner as well? Well, maybe not so fast. Gartner is actually expecting PC sales to grow by 4.4% in 2012 to 368 Million units, and 10% in 2013 to 400 Million units. Such growth is expected to be driven by the release of Microsoft's (MSFT) Windows 8 operating system, in addition to new Ultrabook computer models.

Maybe Apple will simply eat some of HP's and Dell's afternoon snack for the time being, and upon the release of Windows 8, in addition to newly found economic strength, there will be plenty of food to go around... If so, this could be a good time to start dipping into buying HPQ and Dell shares. Despite possible positive prospects for Dell and HPQ, Apple shares could also continue to be good value as they reach for $600/share.

Source: Apple Ate HP's And Dell's Lunch - Is Dinner Next?