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Plunging PC sales could mark a move into 'unknown territory'

Personal computer sales are doing even worse than expected.

PC shipments plunged 10.8 percent in the third quarter, compared to the same period one year ago, according to IDC, echoing a similar finding by Gartner. The number widely surpassed projections of a 9.2 percent decline, IDC stated.

Crawford Del Prete, chief research officer of the firm, told CNBC last week that the most recent numbers show that the PC business is venturing into "terra incognita" — Latin for "unknown territory."

This particular drop is largely attributable to Microsoft's move in July of offering free updates to its Windows 10 platform, Del Prete said. While the move is intended to boost long-term consumer engagement, free updates wiped out the need for many customers to buy a new computer.

Read More Microsoft aims to turn Windows into a mobile platform

"The impact of that on the marketplace is something that we are just understanding now," Del Prete said in a phone interview with CNBC.

The overall decline in PC usage and sales has persisted for several years, thanks to a shift to smartphones and tablets. With competing methods to go online, the urgency to upgrade personal computers has faded, Del Prete said.

It also remains to be seen whether or not Microsoft's free upgrades will help drive futures sales in the long term.

A 'shrinking pie' that's 'dying fast'

For Max Wolff, chief economist of Manhattan Venture Partners, it can only get worse for PCs because personal and work usage is declining as computer life extends.

Wolff said he sees the market dividing into two main product providers: cheap manufacturers out of emerging markets and luxury makers such as Apple.

Those that don't fall into either of those categories are "kind of dying faster," Wolff told "Trading Nation."

"This is a shrinking pie, shrinking more systemically and more rapidly than all but the most dire forecasts [predicted]," he added.

Apple aside, many computer companies have struggled this year, he added. The stock of Lenovo, which trades in Hong Kong and saw shipments decline 5 percent, is down more than 31 percent year to date. Another company that saw a 5 percent drop in shipments, HP, has fallen 27 percent year to date.

Read MoreWhy IBM could be the next HP

Meanwhile, both Microsoft and Apple are both up about 1.5 percent for the year, underscoring how the market may be separating .

"We had expected this bottoming process to be a little less dramatic, and a little bit less long in duration," Wolff said.

However, Del Prete said the drop in third-quarter shipments was a severe, short-term reaction, and will resolve in 2016.

"We believe that the PC market can and will stabilize," Del Prete said. "But it's been a tough slog."

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Brian Sullivan

Brian Sullivan is co-anchor of CNBC's "Power Lunch" (M-F,1PM-3PM ET), one of the network's longest running programs, as well as the host of the daily investing program "Trading Nation." He is also a frequent guest on MSNBC's "Morning Joe" and other NBC properties.

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