PCs may be hot holiday gifts this year

Are PC sales dead? Far from it! The personal computer's demise has been predicted in many circles for years now as applications and tools move to the internet from the computer hard drive. But then again, you have Microsoft Corp. (NASDAQ: MSFT) and Apple, Inc. (NASDAQ: AAPL) both releasing brand-new operating systems this year and trumpeting them all over the world. In Microsoft's case, it's Windows Vista and in Apple's case, it's the Leopard operating system.

The market continues to shift from powerful but bulky desktop PCs toward notebook PCs, and that trend will continue into the holiday season this year. It's scary to think that PC sales would eventually slow down after everyone has bought a notebook, but just in case that happens PC makers are shifting sales focus to markets outside the U.S., something that has been increasing in scale this year.

Let's put it this way -- out of the top consumer electronics "must have" items as measured for this holiday season by the Consumer Electronics Association, computers beat out big-screen TVs, clothes and money (among other things). As measured in the third quarter of this year, PC sales in the U.S. grew at about a 5% rate compared with a 15.5% rate across the rest of the globe.



So PCs are catching fire in many other areas outside the U.S. even as respectable single-digit growth happens here. For an old technology that just continues to apparently get better, PCs are long from dead. My guess is that the hardware is basically no more than a strong commodity, but the internet is what is driving sales of PCs. If you're not connected, then who are you? Someone in the market for a PC, that's who.