Guess Where HP And Dell's Missing Customers Went?

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 |  Includes: AAPL, DELL, HPQ
by: Stephen Rosenman

HP (NYSE:HPQ) and Dell (NASDAQ:DELL). Really guys? Those quarters didn't impress. Since reporting, HP and Dell each have tumbled more than 8%. HP actually saw $8.9 billion go swirling down the drain, losing $4.49 a share (or making $1.00 a share if you want to keep a blind eye to the goodwill impairment and restructuring costs). Dell's revenue dropped 8%, earnings fell 9%, and guidance weakened.

It was the declining PC sales that got much of the attention because these companies made their reputations selling computers.

Take a look at their dropping PC revenues year-over-year. I've included Apple's (NASDAQ:AAPL) last quarter computer/iPad sales for comparison purposes. Dell and HP notebook/desktop sank 14% and 12% respectively while Apple's sales climbed 27%. Guess where Dell and HP's lost sales went?

Dell and HP lost a combined $1.3 billion in revenue while Apple gained $3 billion. Again, you can bet Dell and HP's missing customers bought iPads during the quarter.

The market is shifting away from PCs to tablets, the category Apple dominates. Best Buy (NYSE:BBY) noted the shift from notebooks to tablets in its most recent conference call.

Gartner explained the move from computers to tablets:

Consumers are less interested in spending on PCs as there are other technology product and services, such as the latest smartphones and media tablets that they are purchasing.

Dell and HP's loss is Apple's gain. Apple and its iPad stole old tech's bread-and-butter.

Disclosure: I am long AAPL. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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