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Apple is not immune to PC bloodbath

Thursday, 10 Oct 2013 | 12:09 PM ET
PCs are more niche: Pro
Thursday, 10 Oct 2013 | 10:18 AM ET
Mac sales have slid since last year. Colin Gillis, BGC Financial, weighs in on the decline.

It's no secret that PC sales have been, well, bad for awhile now. Sales of Apple's Mac computers, however, have held fairly well up for the most part.

That may be shifting.

In the third quarter, Mac sales dropped 11 percent to 1.9 million from the period a year earlier, according to an IDC report. What's more, Apple was the only company among the top five U.S. vendors to post a decline in shipments.

"The PC market in general has been in six quarters of consecutive decline, and it's getting cannibalized by tablet sales," BGC Financial's Colin Gillis told CNBC on Thursday.

"You go back and the peak actually happened in September of 2011. PC sales as a total are down 17 percent since then, and if you add up the numbers, it correlates with tablet sales. Tablets are cheaper, tablets are easier and the PC may wind up becoming more of a relegated, niche product."

Apple Mac Air
Getty Images
Apple Mac Air

For Apple, it use to be all about the "halo effect," Gillis said. Consumers would buy the iPhone or iPad, and Apple bet the consumers would get pulled into the entire ecosystem and begin buying MacBook Pros or MacBook Airs. But, that halo effect is fading, Gillis said on "Squawk on the Street."

(Read more: Ditching Apple for Android? What you need to know)

"So on the one hand, we have a nice new revenue stream for tablets, and on the other hand we have PC sales slumping and that is a negative," said Gillis, who has a $500 price rating on Apple stock.

(Read more: Why I don't like Apple stock: Gabelli )

In addition to iPad sales cannibalizing Mac sales, Apple also has to worry about its tablet competition. Amazon, Google even Microsoft are offering tablets priced below Apple's iPad.

(Read more: Samsung's curved phone; new Apple iPads?)

"Price competition is impacting Apple in the tablet space. It's the same pattern as phones. Android tablets have now crossed over the 50 percent line taking market share from Apple," Gillis said.

(Read more: Forget the iPhone 5S, let's talk about the iPhone 6)

Apple's highest margin product is still the iPhone, followed by the iPad and then Macs. Gillis said that he sees only a few catalysts left for Apple, which includes a deal with China Mobile.

(Read more: Apple, China Mobile deal may be coming soon)

"Apple knows its niche," he said. "They keep their prices high. They are trying to keep their margins intact, but unfortunately they are going to lose a segment of the marketplace. It's just, it is what it is."

By CNBC's Cadie Thompson. Follow her on Twitter @CadieThompson.

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  • Matt Hunter is the senior technology editor at CNBC.com.

  • Cadie Thompson is a tech reporter for the Enterprise Team for CNBC.com.

  • Working from Los Angeles, Boorstin is CNBC's media and entertainment reporter and editor of CNBC.com's Media Money section.

  • Jon Fortt is an on-air editor. He covers the companies, start-ups, and trends that are driving innovation in the industry.

  • Lipton is CNBC's technology correspondent, working from CNBC's Silicon Valley bureau.

  • Mark is CNBC's Silicon Valley/San Francisco Bureau Chief covering technology and digital media.