PC makers look to the smartphone market to offset slumping PC sales

Posted Aug 25th 2009 1:00PM by Brian White
Filed under: Industry

PC makers like Hewlett-Packard Corp. (NYSE: HPQ), Dell Inc. (NASDAQ: DELL) and Taiwan's Acer have seen computer sales decline in the past year as consumers faced a recession and tightened wallets.

Now, this isn't the first time PC sales have slumped, but it did send a red flag up a bit to those the sell the most: how about diversifying a little bit?

HP already diversifies -- there are its services business, its printing division, and so forth. But what about smartphones? That's right, those BlackBerries and iPhones are selling at a higher percentage of sales every quarter as consumers trade up from basic "featurephones" to full-fledged smartphones.

In other words, the category is red hot. Entering into the field in 2009 would not be easy just due to the extreme competition. PC makers really don't have relationships with mobile carriers either, nor expertise in the product cycle with hardware or software.

Near-term gains would be small, so an HP or Dell smartphone wouldn't be something to prop up revenue within a few quarters. But starting now may be smart for three or four years down the road: smartphone shipments this year could grow 23% to 171.9 million units -- at the same time the traditional handset market could shrink 9.1% globally.

Smartphones are bridging the gap between a PC and a handheld device anyway, right? That gap will only continue to grow smaller.

Tags: Acer, Dell, Gateway, HP PCs, HPQ, inthenews, PC sales, Smartphones