Are 5 PC vendors too many?
The disk drive experience
Back when disk drives were young, dozens of vendors fought for storage dollars. Over 220 companies manufactured disk drives in the last 50 years, but today we are down to three.
Seagate and WD have moved into the low-end subsystem market, as well. Not just internal drives, but drives in USB enclosures and four- to six-drive RAID arrays.
PC as appliance
Likewise, we no longer need a dozen PC vendors. Most people buy notebooks today while the even more appliance-like tablets continue to win converts.
We don't need dozens of different kinds of desktops. We don't even need dozens of different notebooks or all-in-one systems.
The increasing consolidation of the industry — with HP and Lenovo taking market share away from struggling Dell — tells us what we need to know. With two CPU vendors and a few display vendors, there really aren't that many combinations possible.
As appliance PCs proliferate, we also no longer need software that can be adapted to dozens of systems. The Windows OEM model is broken. Microsoft's tablets won't be the last hardware from Redmond, Washington.
Good news
Big, deep-pocketed players bring substantial advantages to consumers. Tighter integration will mean higher quality, greater reliability, and better security. Of course, lower hardware margins will reduce Microsoft's and Google's profits, but investors will adjust.
Apple has invested billions of dollars in equipment, forward purchase contracts, and innovative small firms to ensure a large supply of high-quality products. No independent hardware vendor could compete with them, which is why they dominate the high end — $1,000+ — market.
Just think of what Microsoft and Google could afford to do, if they put their minds to it.
The Storage Bits take
Enthusiasts will keep building their own systems. Specialized requirements for gaming, video, CAD, and 3D visualiztion will drive a custom PC market for the next several decades.
But the PC market has stopped growing. That means PCs are no longer an exciting market for investors. Consolidation — such as in the hard drive industry — is the order of the day in PCs.
The good news is that we've still only scratched the surface of what is possible with smart machines. The locus of investment has shifted, but the computer industry's future is still bright.
Comments welcome, as always. Will you miss having dozens of choices in PCs, or will it simplify your life?