Can PC makers survive in a post PC world?

Summary:HP is laying off more than 27,000 employees and Dell's Q1 2012 earnings were weak across the board.

Zack Whittaker

Zack Whittaker

Yes

or

No

Jason Perlow

Jason Perlow

Best Argument: No

The moderator has delivered a final verdict.

Opening Statements

The terms will change

Zack Whittaker: Post-PC world. Pah, I say. I'm not a sore loser, honestly. The post-PC world clearly is among us and Microsoft's break into the Windows tablet market will only solidify this era.

There's a side to this Mr. Perlow likely hasn't considered. Forget numbers. Forget layoffs. PCs aren't dead yet, and even if they are, the term is so entrenched in every-day life, we cannot afford to kill it off completely.

Forget whether PC makers will survive in a "post PC world". The terms will change. When Apple rolled out a "4G-capable" iPad, it was met with extreme criticism after it was found it would not connect to a 4G LTE network outside North America. Apple promptly went to court to try and change the name of "3G" to "4G" in a bid to comply.

This is likely what'll happen with the PC market. There won't be -- ergo, PC makers will survive in a "post-PC world". Because the gap between PCs and tablets will converge so far the two will be synonymous.

The hard truth

Jason Perlow: Just over eight months ago, Zack and I were were both standing here on our virtual podiums debating whether "Post-PC" was actually real or if it was bunk. In the end, while Zack put up a good fight that the PC would never die, the arguments favored that the Post-PC world was upon us.

Eight months later, two giant PC manufacturers are in dire straits -- Hewlett-Packard recently announced laying off over 27,000 employees and Dell's Q1 2012 earnings have been weak across the board in their Consumer, Public Sector and Enterprise divisions.

Apple, on the other hand, is doing magnificently, with their products accounting for over 22.5 percent of mobile PC shipments globally in the first quarter of 2012, 80 percent of that being their own Post-PC iPad tablet, with 17 million mobile PC units shipped, according to NPD Displaysearch.

The hard truth is facing us -- traditional PC purchases are slowing down dramatically. Unless you are cultivating a strong business in tablet computers and smartphones as well (such as Lenovo) it's going to be a very uncomfortable ride in the next few years for the PC manufacturers.

The Rebuttal

  • Great Debate Moderator

    Thanks everyone

    Whittaker and Perlow will post their closing arguments tomorrow and I will declare a winner on Thursday. Between now and then, don't forget to cast your vote and jump into the discussion to post your thoughts on this topic.

    Posted by Jason Hiner

  • Great Debate Moderator

    Consolidation in the PC ecosystem

    Will there be consolidation in the PC ecosystem in the years ahead? Who will be most likely to emerge as the winners?

    Posted by Jason Hiner

    Forget HP and Dell. Hello, Lenovo.

    I think Lenovo, considering its move into Brazil to target the emerging market in Latin America, will tip over HP in the coming year. Dell will likely continue on, barely innovating and floundering and wondering why it continues to lose market share, and Acer will just crumble. Acer's not really very good at anything. I also wouldn't be surprised to see some of the PC builders with a smaller market share merging in a bid to take on whoever emerges as the new number one leader. If that means Dell dropping down the chain and teaming up with Asus as an up-and-coming star in the tablet world, combined the two would be enough competition to have Lenovo quaking in its boots. Provided the worldwide regulators do not see it as an antitrust-brewing coalition of taking on the top dog in the PC building chain, I see no reason why it can't work. Having said that, as with the tablet and smartphone market, there's already a duopoly in Android and iOS -- and the same could easily happen with the non-tablet PC market.

    Zack Whittaker

    I am for Yes

    It's a virtual guarantee.

    Unquestionably. Lenovo is likely to usurp HP as top PC dog within the next two years because it is not as fat a company, it's a virtual subsidiary of the Chinese government with huge domestic demand for their products, and has done well diversifying into Android and Windows tablets in addition to smartphones. In addition to Lenovo getting bigger or even consuming weaker brands (Fujitsu/Toshiba/Panasonic's PC divisions or possibly even Dell) we may very well see Microsoft and Intel have stronger relationships with what we might now call Tier 2 or Tier 3 Chinese vendors, such as Asus and Acer, which are not nearly as margin sensitive as the Big Three. It is probably inevitable that a bunch of these Chinese and also Korean firms will consolidate as margins become hair-thin. It also would not surprise me to see Samsung's PC business improve due to their diversification and their leadership in consumer electronics and component manufacturing business as well.

    Jason Perlow

    I am for No

  • Great Debate Moderator

    How do today's PC makers become leaders in the next generation?

    If you examine the manufacturers in the PC ecosystem, a lot them are already struggling, especially HP, Dell, and Acer. Lenovo and ASUS have a little bit of momentum. What do all these companies need to do in order to be leaders in the next generation of computing?

    Posted by Jason Hiner

    PCs are like Nokia phones.

    Perlow is right. Apple has one version for each product. PC makers have every different possible combination of product. In fact, PC makers collectively are a lot like Nokia. The once-proud phone giant develops a phone, dubbs it a number like 6000. It upgrades the camera and gives it a different ringtone and brands it the 6100. There is too much fragmentation in the PC market, and frankly, it's not that OS X is easier to use, or Mac's work better -- they're just easier for the ordinary end-user. With Apple products, you don't have to know how it works -- it just does. Two words to PC makers with that in mind: simplify everything.

    Zack Whittaker

    I am for Yes

    Diversify and Simplify

    As I touched on earlier, diversification into Post-PC products by these companies and eliminating redundant products/streamlining is going to crucial in order to survive the transition. If we look at Apple as an example, they only have a few basic types of Macs and Macbooks -- the Macbook Air in two sizes, the Macbook Pro in three sizes, two sizes of iMac, two variants of Mac Mini, and the Mac Pro desktop. The Mac Pro is likely going to be discontinued or some amped-up Sandy Bridge version of the Mini or the iMac will end up taking its place (iMac Pro?) It also wouldn't surprise me at all to see Apple further streamline and eliminate the Macbook Pro/Air and just have a single Macbook line sometime in the future merging the technologies of both lines. Apple has no problem doing more with less, and its profits reflect heavily on that philosophy. By comparison, your average PC vendor has a lot more flavors of system they are trying to sell. For example, HP has at least 5 lines of laptops with multiple sizes within each line, and at least 16 types of desktops. This is madness, and it's no wonder the company is experiencing problems.

    Jason Perlow

    I am for No

  • Great Debate Moderator

    How many workers will still need full PCs in a decade?

    Clearly, full-blown PCs are still going to be needed by developers, content creators, and others. What percentage of business professionals do you predict will still be using the equivalent of today's desktops and laptops a decade from now?

    Posted by Jason Hiner

    Less than a fraction.

    A decade from now? Less than five percent. I think Ultrabooks will rise up, and tablets will continue to chip away at the traditional PC market share. But I think the two will run parallel while occasionally crossing over from time to time.

    Zack Whittaker

    I am for Yes

    A lot less than exists today.

    Less than 10 percent of the current global PC population, if not as low as five percent. It could be even less depending on how big technologies like VDI take off. Give a developer or someone in the scientific/engineering field a lot of back end server power on a private cloud and a professional monitor attached to a thin client, with technologies like Microsoft's RemoteFX for server-side GPU rendering of virtual desktops, and the need for those big desktops could entirely disappear.

    Jason Perlow

    I am for No

  • Great Debate Moderator

    Intel's hybrid approach

    Intel is placing its bets on Ultrabooks and hybrid laptops with multitouch screens. Is that the right approach?

    Posted by Jason Hiner

    Why not?

    Ultrabooks are the natural evolution of the 'bog-standard' laptop. If anything, Windows 7 will keep Ultrabooks in play at least for the next couple of years. Windows 8 will in my view be a flop on the desktop and Microsoft will panic, undo the changes, and Windows 9 will spin back round and focus back on the traditional PC. I'm a pre-post-PC optimist.

    Zack Whittaker

    I am for Yes

    Not leaving much room for alternative plans

    I think there will clearly be some demand for Ultrabooks and Windows 8, but as to how deep it will be compared to tablets and traditional laptops running Windows 7 I cannot say. The prices for Ultrabooks certainly need to go below sub-$1000 or even less to make an impression, because your average consumer laptop goes for about $600. I can say, however, that by not investing in ARM-based semiconductor technologies, Intel doesn't have much of a Plan B.

    Jason Perlow

    I am for No

  • Great Debate Moderator

    Microsoft's leadership role

    With Windows 8, what do you think about the way Microsoft is playing its role as ring-leader?

    Posted by Jason Hiner

    Tablet, schmablet.

    Thankfully Microsoft has seen the light and knows the way forward. (Actually, Microsoft looked at what Apple was doing and pretty much copied it word for word). Microsoft had to appease two markets: PCs on the desktop, and tablets to compete with the iPad. As per the previous question, Microsoft can't lose. Or, if it does, it loses catastrophically and goes down with the rest of the PC making business. At the end of the day, Foxconn and plants that actually build PCs do not care whether it builds PCs or tablets. Neither does Microsoft, as long as PC builders know what they're doing.

    Zack Whittaker

    I am for Yes

    Hedging its bets

    Microsoft has always had an active role in the development of the Personal Computer between Intel and the PC vendors, so I don't see any fundamental difference in what they are doing with Windows 8 than what they did before. However, there can be no denying that with Windows RT, the company is hedging its bets between Intel and ARM, which is obviously making its traditional partners nervous since a huge amount of their revenue stream has been Intel and Windows RT's success is not necessarily assured. The last time Windows ran on multiple desktop architectures was in the early 1990's, when Windows NT was introduced on the PowerPC and MIPS alongside Intel. This is a big deal.

    Jason Perlow

    I am for No

  • Great Debate Moderator

    The transition for Wintel

    When we look at the PC ecosystem with Microsoft, Intel, and all of the PC manufacturers, how do you see them navigating this transition?

    Posted by Jason Hiner

    Win-win. Win-lose. Lose-lose.

    It's simple. If they don't adapt for the post-PC market -- and I'm talking about HP and Dell again -- the chances are they won't survive. Look up from the ground before you trip up. Having said that, those who join the game and try to compete may end up losing at the hands of better competing products. The thing is: PCs all look the same and function in the same way. They all run Windows, and Macs run mostly OS X -- or on the rare occasion -- Windows. Either way, PCs are stuck in this stagnant place where it doesn't matter to the end consumer which PC they get. For the business, they certainly don't. They just want it to be the cheapest for the value they get.

    Zack Whittaker

    I am for Yes

    The road is going to bust a few axles and path will be dangerous.

    Microsoft as a company will continue to survive by transitioning a large portion of its software business towards the enterprise and server-based computing. The consumer and business conversion to the Metro UI in Windows 8 will be a slow one while enterprises retain a significant amount of Win32-based desktop software infrastructure, while its enterprise business will continue to be strong and even expand. However, the continued health of its traditional partners such as HP and Dell are not necessarily guaranteed, as I have explained above.

    Jason Perlow

    I am for No

  • Great Debate Moderator

    Which companies are at risk?

    Which companies are most at risk in the Post PC era?

    Posted by Jason Hiner

    Anyone who has failed to adapt.

    It's the flip side to the previous questions: those who have not kept up with the post-PC evolution, and have failed to adapt their business models and processes to the developing tablet and cloud market, will be left behind. HP and Dell are plain PC makers, and both have suffered at the hands of the early tablet market in the late-2000's. That said, while Dell really fell flat on its face, at least HP had the TouchPad, even if it was doomed from the start.

    Zack Whittaker

    I am for Yes

    Anyone whose bottom lines rely on PC revenues.

    I think any company which has had revenues that are heavily dependent on PC manufacturing and sales had better start thinking about diversification and eliminating redundant products. Obviously, the big targets are Hewlett-Packard and Dell. Dell may still weather the storm because it recently bought WYSE, indicating a future emphasis towards smart devices, VDI and thin clients.

    Jason Perlow

    I am for No

  • Great Debate Moderator

    Which companies will rule?

    Which companies are best positioned to take advantage of the Post-PC era?

    Posted by Jason Hiner

    It's back to the two-ol'-rivals

    Certainly I would say -- at least by my definition of the post-PC world -- cloud companies and PC makers that have or are imminantely ventured into the tablet industry. With that, I'm looking at Apple and Microsoft. Apple is in the perfect position because it has the entire ecosystem at its disposal. It has the iOS-running iPad and already has the lead in the tablet market. In fact, Apple is the tablet market. Windows will likely reign, but on the tablet format it will be interesting to see how it compares with iOS. I think Apple will likely stick to its guns and develop for its platform only, locking in users, while Microsoft will likely extend a productivity olive branch to its iPad-using rivals. Microsoft, if it manages to work its way in, could benefit if it doesn't completely screw up Windows 8, which it already has. People don't want a Windows-running tablet: they want a tablet running Office.

    Zack Whittaker

    I am for Yes

    Apple first, everyone else vying for second place.

    Apple obviously has an extremely large lead in Post-PC devices with its own iPad, and everyone else is currently at a disadvantage due to its market penetration and the maturity of its developer ecosystem. Anyone who joins this bandwagon obviously is in a very good position to penetrate the enterprise and the consumer space as a software or services vendor. That being said, while Microsoft's current mobile offerings have had a lukewarm reception in the consumer space, the company still has tremendous potential for maintaining its lead in the enterprise, given significant advancements with the upcoming releases of the Windows 2012 Server operating system, the latest incarnations of Office, as well as Windows 8 and Windows RT. And while Google and its handset OEMs are doing extremely well in the consumer smartphone space, I do not envision a pure consumerization route for Android tablets in the enterprise a la iOS in the immediate future, at least not until some initiative is taken by the company to write or provide incentives for 3rd-party developers to write enterprise-grade tablet apps, or until they provide a good management framework. Perhaps at Google I/O we'll see some new developments in this area which I believe Android is lacking, particularly now that the Oracle litigation and the Motorola acquisition is behind them.

    Jason Perlow

    I am for No

  • Great Debate Moderator

    Let's define "Post PC"

    Okay, so when we talk about the "Post PC" world, what are we really talking about? For the average business professional and the average company, how does this look different than the past decade?

    Posted by Jason Hiner

    This post-PC 'malarky'

    Let's just say for the sake of argument (and precedence) that Jason is right. We are in a post-PC world. So what is it? The post-PC world does not necessarily mean the traditional PC is dead. Far from. It just means we're including tablets into the fold. The cloud convergence is where we start to see the post-PC world. I would argue that actually, the post-PC world is not a world where PCs no longer exist. I see it as always-connected devices, including tablets and PCs, that have access to a hard-drive in the cloud. All in all, it means instead of storing our documents locally, they will be available anywhere and everywhere at any given time day or night. Datacenters will pop up overnight, hard drive makers will adapt or go bust in the enterprise market, and governments will eventually -- I hasten to add -- wake up to the borderless cloud problem.

    Zack Whittaker

    I am for Yes

    A return to centralized computing infrastructure

    The Post-PC world represents a displacement of computing from the traditional, 30 year-old Intel architecture used on desktop to the Datacenter and the Cloud. In essence, we are returning to a very similar highly centralized model that was popular in the late 60's and mid-1970's with mainframe-based computing. The only difference is that instead of a monolithic, purely mainframe-based time sharing model, our new centralized architecture can be distributed within multiple datacenters, using Public and Private Cloud infrastructure using heterogeneous vendor systems architectures and is more resilient and more flexible than ever before. Business professionals will be using extremely inexpensive ARM and Intel-based thin notebooks, tablets and thin clients (sub $500) which will use any number of software technologies that run within the browser or will use next-generation Web-based APIs and Web Services (Such as those available in Microsoft's WinRT and other HTML5 frameworks) to provide line-of-business application functionality. In addition, I see the application programming standards used by today's most popular mobile operating systems -- iOS and Android -- being used heavily in business environments to provide the front ends to these Web APIs.

    Jason Perlow

    I am for No

  • Great Debate Moderator

    Mic check

    Are both of my debaters online and ready to rumble?

    Posted by Jason Hiner

    One two... one two?

    All systems go, here. Perfect timing: it just started raining in good ol' England.

    Zack Whittaker

    I am for Yes

    Ready.

    Kinda muggy here in Dirty Jerzey.

    Jason Perlow

    I am for No

  • Great Debate Moderator

    Which technologies will rule?

    What kinds of technologies -- both hardware and software -- are going to rule in the Post PC era and how does this play into the BYOD trend?

    Posted by Jason Hiner

    Tablets aren't PCs just yet

    Because tablets are 'lesser' devices than their PC cousins -- lacking physical keyboards for 'actual' productivity and hard drive space for files -- a lot of tablets outsource to the cloud. Having said that, with flash memory, it keeps tablets competitive. It also means they're more expensive compared to the whizzing hard-drive-using PC counterparts. The trouble is: you can't really bring your own cloud. Dropbox works well for ordinary consumers, as does SkyDrive, but Google Drive has still -- hmmm -- a way to go, let's say. There is no crossover from personal cloud to enterprise cloud, and this falls in conflict with the BYOD trend. You can bring your own cloud-enabled device from home, but find that it is stuck in either work-mode or home-mode, and there's no middle ground.

    Zack Whittaker

    I am for Yes

    An evolution of what exists today in the mobile space.

    Within five years, the average business professional will be transitioning from "Heavy" clients such as desktop PCs and business laptops with large amounts of localized storage and localized applications using Intel chips and Windows to very small and extremely power efficient, SoC-based systems using completely solid state storage (SSD) which will function mostly as cache for applications that run remotely. I see a mix of both ARM and Intel's next-generation Systems on a Chip (SoC) using sub-22 nanometer manufacturing processes fulfilling this role, with the predominance of the market being addressed by ARM-based devices as we move further into the future and backwards compatibility no longer becomes as pressing an issue. I also expect that during the 5-year transition period to fully Web-based apps, there will be a significant amount of virtualized desktop apps (VDI) via Microsoft's Remote Desktop Services and RemoteFX in order to bridge the gap. In regards to BYOD, I see mobile hypervisors such as Intel's Wind River, Open Kernel Labs OKL4, Red Bend's vLogix and VMWare's own Horizon product being used in conjunction with mobile software management solutions to provide security and partitioning for the employee that chooses to bring their own devices to work, particularly if they are Android, Windows Phone or Windows RT-based solutions. I also expect that for iOS, Apple will either partner with major enterprise software vendors for providing a similar type of security partitioning, or buy/roll their own solutions in order to make their mobile operating system a first class managed citizen in the enterprise.

    Jason Perlow

    I am for No

Closing Statements

PCs will likely never go away

Zack Whittaker

Why? I don't believe it falls squarely with the PC manufacturer. I feel we have yet to reach a point where the traditional PC model is replaced by something better. With that, PC demand will remain even as we venture into a post-PC world.

Having said that, it's not as cut-and-dry for PC makers. Most traditional PC makers have already pushed into the tablet world -- with some hits and misses -- and some will not survive. I think later on down the line, mergers and further cultural transitions will further dictate how we use computers, and PC builders will have to bundle together to weather the likely market share storms.

The thin-client approach that endorses cloud technology will develop during the Windows 8 lifetime. Despite its abhorrent visuals, it will keep the traditional PC business ticking over until Windows 9 -- when it will likely regain traditional PC focus.

Perlow said it well: This is about whether PC companies can sustain a business model on building and selling PCs. For that, it's a clear and obvious yes.

The writing is on the wall

Jason Perlow

Look, you don't have to be Carnac the Magnificent to see the writing on the wall. It's painfully obvious that we still have too many PC manufacturers and they have too many redundant products to sell, with a falling demand for their wares.

The majority of consumers desire and require inexpensive, mobile devices that do the basics (Web, Email, Social Networking) along with easy to use apps that leverage data stored in the Cloud.

Conversely, businesses and the enterprise want devices that are low cost, power-efficient, low maintenance and easily manageable, with the ability to leverage applications and data running in their datacenters.

Only Post-PC devices such as tablets, ARM-based systems and thin clients (such as Google's Chromebox) can achieve this.

Sure, some people will still require the horsepower and complexity of the PC. But this debate was never about the PC itself going away; it's whether or not PC companies as a whole can sustain a business model on revenue largely dependent on PCs.

And to that, the answer is a resounding no.

PC ecosystem faces transformation

Jason Hiner

This is a topic that we've debated before and we're certainly going to be debating again in the future. This is where a lot of big stuff is happening -- like Apple riding strong iPhone and iPad sales to pass Microsoft and IBM and become the world's most valuable technology company. And, it's where a lot of big stuff is going to be happening in the next several years -- thin clients, desktop virtualization, PC/smartphone convergence, BYOD, and more.

As Zack explained, the rise of tablets isn't going to put HP or Dell or Microsoft or Intel out of business any time soon. In fact, PCs are going to easily outsell tablets every year for the next five years. However, when we look at the overall mobile device market, there is still a huge growth curve ahead for smartphones to replace traditional mobile phones, especially in the developing world where these smartphones are going to become the de facto computers for the masses. When you combine that with the fact that tablets are eating the bottom out of the PC market, then you suddenly see how the traditional PC is going to evolve into specialized tool for high-end workers.

That's why I have to vote against the crowd on this one and side with Perlow, who more clearly articulated the future trajectory of the market and what it means for the way today's PC ecosystem is going to have to transform itself in the years ahead.

Topics: Great Debate

About

Jason Hiner is Editor in Chief of TechRepublic and Long Form Editor of ZDNet. He writes about the people, products, and ideas changing how we live and work in the 21st century. He's co-author of the upcoming book, Follow the Geeks (bit.ly/ftgeeks).

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