For the last few years now, analyst reports on PC sales have been predicting the slow and painful death of the PC era. As of late 2012, smartphone sales, for the first time, surpassed those of traditional computers.

While the top computer companies have pretty much been ignoring this shift, they have continued to watch, from the sidelines, as tablets and smartphones beat up on their market share.

This holiday season, sales of PCs marked another milestone in the demise of the PC. For the first time in five years, PC sales during the holiday season fell despite the new Windows 8 operating system – expectations of reviving the PC with a touch-friendly interface.

The latest version of Windows OS is the most radically different in 20 years, as it enables consumer devices to have a tile-based touch-friendly interface while maintaining the same functionality Windows users have enjoyed over those years.

In the past, a new Windows operating system usually stimulated PC sales. According to analyst Aaron Rakers of Stifel, Nicolaus & Co., this state of negative dynamics in the PC market will continue until Windows 8 gains some traction by getting fully installed and prices start to come down.

A total of 89.8 million PC units were sold in the fourth quarter of 2012, which saw the worst performance in five years. In total, 2012 saw a 3.2-percent drop of PC sales from 2011.

While the Surface tablet from Microsoft (News - Alert) and its touch-friendly Windows 8 OS were designed to counter this descent, the radically-different software has not captured the consumers’ imaginations as expected.

Microsoft was noticeably absent at the recent Consumer Electronics Show. Other PC makers, however, filled its gap with an array of computers and lightweight laptops, all running Windows 8. According to Sarah Rotman Epps, an analyst at Forrester (News - Alert), “Windows is going to be a slow ramp, regardless of hardware quality.”

While some could argue the poor economic climate is to blame for slowing PC sales, increases in performance from tablets and smartphones and a proliferation of new and lighter applications, faster mobile broadband networks and use of the cloud could very well be the underlying factors.

Whatever the reason, the old PC, as we’ve known it for the last 20 years, is slowly taking a back seat.

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