Tickers in this Article: BBY, DELL, HTCH, WDC, HPQ, INTC, BRCM
Horror movies have a lot to teach us. That noise is never "just the cat," it's a bad idea to go into the woods at night wearing only underwear, and tape recordings of demonic incantations tend to spoil a weekend in the woods. But perhaps most important is this lesson - nothing is ever truly dead so long as someone can figure out how to make money from it.

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To that end, perhaps the death of the PC has been exaggerated. With encouraging results from Best Buy (NYSE:BBY) and stronger than expected guidance from Hutchinson Technology (Nasdaq:HTCH) - a manufacturer of suspension assemblies for hard-disk drives - it seems like their may be life yet in the market for desktops and laptops.

Best Buy's Earnings - Maybe Not So Good for PCs
Best Buy certainly had a good quarter, and the market responded accordingly. Whether it was great news for the PC market, though, is not so clear. There is no question that sales growth from computing and mobile phones was the leader for the company, but the problem lies in the details. Mobile phones from HTC, Motorola (NYSE:MMI) and the like continue to be hot sellers, as do tablets from Samsung, Research In Motion (Nasdaq:RIMM) and so on. Unfortunately, then, while Best Buy management's indicated that notebook sales had improved, they aren't necessarily strong.

More PC's at Dell? Not So Much...
Dell (Nasdaq:DELL) too had an encouraging quarter, but here too there was not much sign of a rebound in the PC industry. Dell stood out primarily on the basis of better margins; sales of PCs (desktops and laptops) actually were not all that strong to consumers, small businesses or the public sector. While there was some juice in the enterprise customer category, that appears to have come from corporate refreshes.

Hutchinson - Market Growth or Share Growth?
On the surface, Hutchinson's earnings guidance news was encouraging. While the company had expected fiscal third quarter shipments to be flat relative to second quarter shipments, the company now thinks shipments will be up about 10% sequentially.

That should be encouraging news for PCs, right? After all, these suspension assemblies go into the drives made by Western Digital (NYSE:WDC), TDK and Seagate (NYSE:STX) (though Seagate sales are a relatively small part of the total), and those drives go into the PCs made by the likes of Dell, Hewlett-Packard (NYSE:HPQ) and so on. Here too, the details seem to really matter. Management's commentary suggests that the growth was more of a byproduct of capturing more share with some customers and seeing its major customers capturing more share themselves - in other words, it looks like the market pie is being cut in a fashion more favorable to Hutchinson as opposed to real growth in the pie itself.

Still Reasons for Some Optimism
Even if early-summer results are not pointing to a robust rebound in the PC business, that does not mean this market is dead or dying. Tablets and smartphones are very good for some things, but not equally good at all things - there is still a place for products like notebooks. What's more, new chip lines from Intel (Nasdaq:INTC) and Nvidia (Nasdaq:NVDA) could spur another wave of buying as consumers look to replace obsolete equipment and take advantage of the inexorable trend towards more performance for less price.

The Bottom Line
There are good reasons to invest in companies like Best Buy, Dell and Hewlett-Packard, as well as PC-sensitive chip companies like ON Semiconductor (Nasdaq:ONNN), Marvel (Nasdaq:MRVL) and Broadcom (Nasdaq:BRCM). The irony is that those good reasons do not have much to do with the PC business. While the PC business may well have some legs left in it, it's not going to be a hot market again. Instead, going back to the opening paragraph, it is likely to shuffle along as one of the undead, offering cash flow here and there, but not much excitement or growth potential. (For related reading, also take a look at 3 Reasons Why Dell's Cash Is King.)

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