Worldwide shipments of the once-mighty PC will see their most precipitous decline ever this year, with even more bad news to come in 2014. PC shipments, which just months ago were expected to fall 9.7 percent, instead will drop 10.1 percent this year, representing "by far the most severe yearly contraction on record," according to research firm International Data Corp. And IDC expects global PC sales to fall an additional 3.8 percent in 2014.
The shift away from PCs has reshaped Silicon Valley, putting tremendous pressure on stalwart companies like Hewlett-Packard (HPQ) and Intel (INTC) while leading to the enormous growth of Apple (AAPL), Google (GOOG) and Facebook, which have so far successfully mastered a new technology order that favors smartphones and tablets over PCs and notebooks.
Still, it's probably premature to write the PC's obituary.
While the number of PCs shipped around the world plunged from 349.4 million in 2012 to 314.2 million this year, sales are still expected to top 305 million in 2017, according to IDC, which released its report Monday.
That's in part because new sales in emerging markets should help soften the hit of declining sales in the United States and other developed countries.
"PC sales haven't stopped," said Greg Sterling, senior analyst with Opus Research. "They're just competing with all of these other things that you can use -- small tablets, big tablets, big-screen smartphones and all of these other devices that are fun and sexy and cheaper."
And despite the explosion of smartphones and tablets, 68 percent of post-Thanksgiving Cyber Monday shoppers relied on their desktop PCs to make online purchases, according to Ovum's Consumer Insights survey.
By comparison, one in five online shoppers made purchases on their mobile phones and only 14 percent used a tablet for Cyber Monday shopping, according to Ovum.
"Consumers clearly still feel more comfortable with their PC and laptop," Angel Dobardziev, principal analyst at Ovum, said in a statement.
Gartner, which is preparing its own end-of-the-year analysis of PC sales, has a slightly rosier forecast: flat sales for 2014 followed by single-digit growth in subsequent years -- "definitely not a decline," said Mikako Kitagawa, principal research analyst at Gartner.
Still, she added, "We think that 2013 will see the worst decline in PC history. ... The PC used to be the only device to connect to the Internet. Now there are many choices, and last year and this year have seen structural changes because of tablets and other mobile devices."
Part of the problem is the endurance and reliability of PCs compared with mobile devices, which consumers tend to turn over more quickly, said Ezra Gottheil, principal analyst at Technology Business Research.
"Basically people are keeping their PCs longer," Gottheil said.
In further confirmation of this technological shift, IC Insights reported Tuesday that worldwide cellphone sales will overtake sales of desktop and notebook PCs for the first time.
Cellphone sales are expected to generate $247.2 billion this year, compared with PCs at only $208.3 billion, according to IC Insights.
The decline of the personal computer has had a huge impact on the fortunes and workforces of many Silicon Valley companies. PC maker HP and Intel -- whose chips are widely used in PCs -- have seen their sales struggle, and HP has shed thousands of workers.
"Right now the companies at risk are clearly HP and Intel -- and Microsoft is definitely on the losing end of all of this," said Patrick Moorhead, principal analyst with Moor Insights & Strategy.
Companies that took advantage of the shift have prospered, adding thousands of jobs and billions of dollars of stock market value. "The winners are going to be guys like Apple and Google, which have more devices and more platforms for mobile advertising," Moorhead said.
The shift from PCs to tablets also has changed the strategy of the valley's social media giants. Facebook, Google and Yahoo (YHOO) are scrambling to design new advertising geared to the much smaller screens of smartphones and other mobile devices. Facebook's mobile advertising business accounted for nearly half of its $1.8 billion in advertising revenue for the quarter that ended Sept. 30.
Contact Dan Nakaso at 408-271-3648. Follow him at Twitter.com/dannakaso.