The end of the PC era

86 Comments

For nearly 30 years, personal computers as we have known them have been the drivers of the technology engine. From Intel (s INTC) to Microsoft (s MSFT) to Dell (s DELL) to HP (s HPQ) to Micron Technology (s MU) — many fortunes were made on the back of the PC. But the rise of mobile computing is upending the technology business and is simultaneously redefining what is a personal computer and how we use it.

On Thursday Hewlett-Packard, one of the oldest companies in Silicon Valley with deep connections to the PC ecosystem (they paid $25 billion for Compaq in 2002) and the world’s largest seller of PCs, confirmed it is looking to sell off its personal computing business. It’s also getting out of the hardware game altogether, ditching its tablet and smartphone operations too. But if HP does eventually find a buyer for its PC division, it will only be catching up with IBM, which in 2004 decided that the low-margin PC business wasn’t worth pursuing.

HP is not the only company that is finding itself on the wrong side of PC history. Earlier this week Dell reported its earnings and acknowledged that its bread-and-butter PC business isn’t what it used to be.

But it’s not just those two. Annual growth rates for the PC industry as a whole have been shrinking in recent years, with small single-digit rates of growth. It can’t be inspiring for the manufacturers looking at their balance sheets.

Those companies looking to innovate won’t find much interesting about building PCs anymore either. Laptops will get faster processors, and marginally thinner. HP and Dell, along with the other top PC companies by volume (Acer, Lenovo and Toshiba) build essentially the same computer, with the same software, chips, and hardware. The only thing to scrap over is minor design flourishes and who can price theirs the cheapest–not exactly an inspiring business if you’re interested in being a part of mainstream personal computing advances. Or, for that matter, growth that will boost your stock and keep investors happy.

Meanwhile, the rise of alternatives to traditional PCs, tablets, continues its march on. UBS recently upgraded its already-optimistic tablet forecast for this year, to 60 million tablets from 55 million, and next year, to 90 million units from 80 million. And it’s not just shipments. People are buying them.

We’re not looking at a complete takeover of PCs by tablets. There will still be several hundred million PCs sold worldwide for several years because people will still need PCs for certain tasks. But it’s very clear that many of the habits we associate with personal computers can be carried out with a decent-sized touchscreen and a good internet connection. And better yet, done anywhere, and quickly.

Before all of these signs became unavoidably obvious, the other original PC company was the only one that saw the end of this era coming and actually did something about it: Apple (s AAPL).

Over a year ago, Apple CEO Steve Jobs started heralding the end of the dominance of the PC, dubbing it the post-PC era. He compared PCs to special-use vehicles in June 2010:

“When we were an agrarian nation, all cars were trucks because that’s what you needed on the farms.” Cars became more popular as cities rose, and things like power steering and automatic transmission became popular.

“PCs are going to be like trucks,” Jobs said. “They are still going to be around.” However, he said, only “one out of x people will need them.”

Not coincidentally, this foretelling of “the post-PC era” occurred after the introduction of the original iPad. Jobs saw the device as the future of personal computing, while critics and skeptics saw it as little more than “a big-screen iPod touch.”

Nineteen months later, we see what the iPad has wrought: the iPad is a blockbuster hit (Apple’s sold 9 million this year, and 15 million all of last year), and has sent PC makers much larger than itself scrambling to come up with a response. Meawhile, PC profits remain low, and even the world’s leader in sales  is disinterested in continuing the slog.

So while the era of the primacy of personal computers in their traditional form is fading, they are not disappearing entirely. They’re just taking on a different form.

Thumbnail courtesy of Flickr user K?vanç Ni?. HP laptop image courtesty of by treehead.

86 Comments

xuniltoor

Giving up a pc is like trading a comfortable sofa to sit on the floor. Not gonna happen. Tablets sales are slowing down and the novelty is wearing off. Bam. Back to laptops and pc.

David Czereszka

I don’t think a tablet will replace my PC that has three 22 inch monitors, 4 core 2nd gen i7 cpu, 12GB RAM and ergo keyboard & mouse anytime soon. Heck my iPad is very slow on websites with a lot of graphics. But my iPad is great for reading the morning news on my USA Today app. The other twenty apps I have I barely use anymore. But the total cost of the twenty other apps was probably around $20 so no major problem.

alex w

I’d just like to point out that even if the ipad did sell 9 million units, it still isn’t anything else other than a large ipod touch, it doesn’t matter about how many people buy it, it matters only that its functionality is very nearly the same. It might have better hardware, but the software is still locked down to the same level.

Helen Troyton

In the quest to go smaller, don’t forget some of us baby boomers have arthritic fingers and thick bifocals making smaller gadgets harder to read and non-flexible fingers harder to push those little, itty bitty buttons.

anon329048392

As a GNU/Linux user, I feel no reason why I would need to stop using a PC. I never intend to buy a tablet. Though smartphones are nice, it isn’t a replacement for a PC.

John R

I can tell you why I haven’t bought a new PC in several years, and I think this holds true for a lot of people: PCs simply have not innovated much lately. Moore’s Law is finally dead. Computing power has reached a limit. Chips are not doubling in speed every 2 years like they used to. So why spend a lot of money on a new computer when your existing machine is almost as powerful. The latest computers are barely any faster than my PC which I bought in 2004.

Guest

Premature thinking. You need a pc/Mac to sync your iPad. That is just out of thousand things you can’t do on a tablet.

Exorsus

Greedy americans … china gonna take over your bussines :-)))

Mario Litano

End of the PC era? You dream. Give it another 10 years perhaps. Windows is a terrible OS but I do not see another viable replacement any time soon. As far as hardware goes, tablets are nice devices but there is no innovation there. It would be sad if the tablet (future) continues the route of ipad, closed systems with lack of hardware extensibility and short life cycle.

Niall Harbison

While there might be little or no innovation left in the PC market it is going to take a very long time for them to be removed from enterprise and the work place in general. Tablets and smart phones really are the future but they are more media devices for consumption in the home whereas the PC will live long in to the future in offices.

Neelabh Rai

In my opinion, PC or simply Desktop market is losing the pace and the other parts such as Laptops, Notebooks, and other handheld devices are picking up the momentum is because of the two major reasons:
1) Portability – one can take it anywhere and whenever required. So, for this part nothing can be done on the PC. But again compared to the other devices I prefer PC because of the inner space available and the options to change it as per my wish. Suppose I am in a need of running 5 different hard-disks at the same instant then it is possible only in my desktop and not in any other devices.

2) Battery Backup – In India this is one of the major and the most important reason that people are preferring Laptops instead of PC esp. in the rural areas, and semi-urban areas. Because, in these places sometimes the electricity supply is not available for continuous 4-5 days and in such an environment it becomes hard to charge the UPS battery and get sufficient power to run the PC. In fact, an UPS takes approx. 2-3 hours and is able to provide only 20-30 min. backup. On the other hand, a laptop 6-cell battery takes hardly 30-40 minutes and is able to provide around 2 hours battery backup. Which is better – PC or Laptop? Obviously Laptop!!

For this part, if the manufacturers can do their bit and are able to provide some mechanism like In-built Battery backup for running PCs only, then it might be possible to gain the losing momentum by PC at least in the rural sections and semi-urban ones.

Additionally, the PC costs too less compared to Laptops / Handheld Devices, and provide much better performance w.r.t. latter ones. So, instead of saying that PC is going to decline, its’ better to look for the renovation of the PC and brings some effective and capable features of Laptops.

Shal

Yeah no. I’m calling BS here. Has anyone ever tried editing a video on a tablet? How about rendering one? Has anyone ever tried to use photoshop on a tablet? What about type a long document?

What about CAD? Has anyone tried not only using a CAD program, but rendering something in CAD? 3D processing?

Hell, what about gaming? Can you do proper gaming on a tablet? Last I checked the only thing available on the tablet markets were really simple games that have been on flash game websites for years.

GDal

How is this any different from the argument against using computers for editing that traditionalists used in the printing, video editing, movie-making or photo processing industry last decade? The software tools came, improved, and took over all of them. What’s stopping the same from happening here?

Doom, Doom 3, Rage are all on the iPad today. AutoCad is working on tablet editions. That’s just the beginning.

Be patient. PCs didn’t take over the world overnight, you know. It took decades. Why do you expect an instant switch over?

karthiq

The title itself is inaccurate….unless it was deliberate to attract comments.

Instead it should have been….”The beginning of the end of the PC era?”

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