PCs – desktops and notebooks – have been key to productivity and entertainment for the last 20 years. 350 million were sold in 2011.
But now we've seen several quarterly declines in PC sales. How deep will the decline go?
Bounding the problem
This is NOT a one-for-one replacement of PCs with smart phones and tablets. There are hundreds of millions of people who can afford a smart phone or tablet but never a PC.
There is also a large population that requires the functionality – multitasking, large screens, exceptional compute and storage, and applications – that are only available on PCs.
But the battle lines are shifting: smartphones and tablets are getting more powerful, and new applications that enable new ways of working are being developed for them. Pilots replace 20kg of documentation and charts with an iPad.
But that's not all. Powerful server-side – cloud – applications, such as IBM's Watson, are also threatening the traditional PC platform. Imagine a physician dictating into his smart phone and a Watson-type service translating his dictation into finished and legible prescriptions, referrals and patient records. Why would that physician need a PC?
One of the early metaphors for personal computers was the idea of the fractional horsepower motor that put computer power where needed. But our electrical system uses centralized power plants provide electricity that we tap into when we need it.
Now imagine you are trying to sell generators. What is your market?
That is the problem facing analysts of the PCs future. There are substitute technologies, many new applications, a rapidly changing technology base and a growing global market. Plus the fact that PCs overshot the requirements of most folks 10 years ago.
The Storage Bits take
PC sales will continue to decline as more people understand that they don't need a PC to surf and email. HDTV screens will do double duty as monitors for people working - or playing - on their phones and tablets.
The long-term market for PCs are for the people who need the storage, computes and peripherals that only PCs support. Creatives. Corporate desk jockeys. Scientists and engineers.
Not grandmas, teenagers and mobile pros. Or most people.
Five years from now PC sales will bottom out at 185 million units - an almost 50% decline from 2011 - about the same as 2003. Tablets and smartphones will be more than 4/5ths of all computers sold.
That's bad news for PC vendors. But the remaining buyers will be willing to spend more, so average sale prices will rise.
But for the rest of us mobile computers with all-day battery life and high-speed wireless networks will enable us to weave cyberspace seamlessly into our everyday lives. It's a brave new world.
Comments welcome, as always. Tell me why you don't agree - or what I missed.