Ozzie, Cook, Gartner: The three horsemen of the PC apocalypse?

Ozzie, Cook, Gartner: The three horsemen of the PC apocalypse?

Summary: Gartner predicts that PC shipments will rise by only 4.4 percent in 2012, signalling a massive slowdown in the market. Has the tablet finally taken over?


Apple's Tim Cook revealed some interesting numbers at yesterday's special event, in which in the new iPad was announced, along with a new Apple TV and some other software goodies.

Apple's numbers show that how far the world has progressed since the PC in line with tablet sales, in particular the extreme growth of the iPad since its inception. Former Microsoft executive 'confirmed' that the post-PC world was upon us at a conference in Seattle. And now Gartner says that PC shipments will rise by a mere 4.4 percent in 2012 to 368 million units.

In singular, you might not have thought twice. Together, it's almost undeniable that we are indeed living in the post-PC world.

Without wanting to dredge up old news --- or debates for that matter --- the definition of a 'post-PC' device let alone a 'post-PC' world is still vague and yet to be clarified. It's probably safe to say that anything that moves away from a desktop or laptop-based computer is a post-PC device.

But whether or not a series of unfortunate --- and in some cases tragic events --- have spurred on the post-PC 'evolution', it remains unclear. The Thai floods are undoubtedly going to have an effect on the PC market, and the natural move towards tablets is only helping that process along.

"PC shipments will remain weak in 2012, as the PC market plays catch up in bringing a new level of innovation that consumers want to see in devices they purchase,” said Gartner research director Ranjit Atwal. "The real question is whether Windows 8 and ultrabooks will create the compelling offering that gets the earlier adopter of devices excited about PCs again.”


Windows 8 could sway it either way, while Apple's OS X "Mountain Lion" remains firmly a desktop and laptop operating system. The trouble Microsoft faces with Windows 8 is while its roots are in PCs, it has no choice but to branch out into the tablet and slate world in order to stave off competition.

Competition is rife, and if Microsoft wants to take a chunk out of the iPad market share pie, it has to find a way to compete.

"However, PCs will face more competition as we see new media tablets based on operating systems from Android and Microsoft, as well the new iPad," Atwal added.

Just as tablets are the next logical progression from the PC, the PC market is still developing on its own, just at a far slower rate. Netbooks were a disaster, and ultrabooks --- spurred on by the MacBook Air 'movement' --- have yet to be proven a success.

As Cook said yesterday, Apple sold more than 15 million iPads in the last quarter alone, which is more than any PC maker did in the same period. But the iPads gain is not the PC's loss, however.

Together, the PC industry is still going strong, but is weak. While Macs are only a small portion of the PC environment, Microsoft has a lot of power in its hands. Microsoft can keep the PC business alive with its next iteration of Windows if it does it right.

Image source: CNET.


Topics: CXO, Apple, Hardware, IT Priorities

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  • Windows...

    Windows (small w, not the OS) is the most important thing for a tablet to conquer. I have looked at tablets, I have used a few, Apple, Android and Windows... None of them can really replace a PC, for me.

    I need a decent keyboard and the ability to look at several windows at once, for my work. Until I can look at those 3 or 4 windows, whilst typing into another, we don't need to talk any further. The same goes for input, until there is a decent replacement for typing (and handwriting recognition and speech aren't suitable alternatives in their current guises), the tablet isn't a real option - and if i attach a keyboard to the tablet, why not just use my desktop, with its dual 24" displays?

    I don't need something portably, I need something that allows me to be productive.

    We have sports cars, why don't we all drive sports cars? Because some of us have families and some of us need to carry big loads around. For somebody like me, the PC is the death knell for tablets. For somebody who only consumes content and writes the odd e-mail, whilst out and about, the tablet is an ideal solution.

    Horses for courses, as the old saying goes.
    • Right on!

      Although I'd compare a tablet PC to a "Smart Car" instead of a sports car: enough performance for your daily commute, but limited storage space & seating for daily errands (let alone long road trips). and limited "speed" performance.

      I always find it funny, too, how people keep saying that tablet PCs will be able to surpass desktop/laptop hardware performance "in the near future". The only way that will happen... is if hardware manufacturers [b]stop[/b] developing hardware for use in desktop & laptop PCs. Considering the tiered expansion & performance support one sees in even desktop PC architecture (i.e. ATX vs. mATX vs. "micro" boards in terms of expansion slots, SATA/IDE drive controllers, RAM slots, & processor size), the day that an extremely small tablet form factor will be able to have more performance than a desktop PC with the same level of technology will [b]never[/b] happen.
      • They get better

        On the other hand, strawman arguments continue to improve in both price and performance. The day will come -- some would say it has arrived -- when a strawman argument could appear right here in ZDNet alongside more traditional statements.
        Robert Hahn
      • So tell me, then, which has better raw performance:

        -- a dual-core processor clocked at 1GHz per core...or a dual-core processor clocked at 2.3GHz per core?
        -- a dual-core processor clocked at 2.3 GHz per core... or a quad-core processor clocked at 2.3GHz per core?
        -- a motherboard that can only fit 2 RAM sticks on it... or a motherboard that can fit 4?
        -- a motherboard that only has 2 SATA controllers... or one that has 6?
        -- a hard drive (whether standard or SSD) that has a 64GB capacity... or one with a 256GB capacity?

        A tablet PC is the "Smart Car" of PCs: it's selling point is "efficiency" based on its size & fuel efficiency, but its storage capacity & speed/performance pales in comparison to larger cars. Show me the tablet PC that can match my home desktop PC for raw capabilities (1TB hard drive, 8GB RAM, 1GB video memory, quad-core processor clocked at 3.5GHz per core), all somehow packed into a tablet-sized form factor... and then I'll ask you for your time machine, so that I can go into the future & buy the equivalent "future-tech" desktop PC that will still be able to outperform it.
  • Well, I know I will be standing in line ...

    ... for a Windows 8, Intel based, hybrid tablet / laptop. (An ultrabook would be preferred.) I would like to enjoy the touch experience of the Windows 8 Metro UI, but I need the desktop to do my work. Also soon after, I would like to get a Windows 8 desktop PC, with a touch screen, for real heavy duty work. All MS essentially has to do, is sell the idea of touch computing - from tablets to large screens - to re-vitalize the PC market, and brush Apple aside. The tablet / touch computing market is not for MS to win. The tablet / touch computing market is for MS to lose.

    If MS can show scenarios of users on large touch screens doing productivity type work more productively, while enjoying more innovation (e.g. integrated telephony apps on their PCs) it would be extremely hard for the PC market to go any direction but up. Also it would silence a lot bloggers / comment makers, who keep whining about using the metro UI as a general PC UI. MS, please try to convince the PC market on the efficacy of large, touch screen computing. When you do this, you will absolutely differentiate yourself from Apple, and gain the common perception, that you have the innovative edge over Apple.
    P. Douglas
  • Wait - I thought a Tablet WAS a PC. What is it with these writers

    One day these bloggers say "tablets are Post-PC" and the next they say that Tablets "Are PC".

    Do they just call it what they want for the sake of the blog, say whatever gets people posting?
    William Farrel
    • He calls the iPad a ...

      ... post PC device, yet includes a picture of a graphic which counts the iPad as a PC. These guys need to make up their minds. Is a tablet personal computer not a personal computer, or is it?
      P. Douglas
  • iPad is not a replacement it is an addition

    It is simple, people did not replace their PC's with the iPad, they just added the iPad to the mix. They did slow down the replacement of the PC because of cash restraints. The vast majority of users will have both.
    • No they will not

      A large percentage of users do not need the power and complexity of a traditional general purpose PC, but they have had no alternative. Now they do, and many of them are abandoning the traditional PC forever.

      I guess you have not spent much time trying to support "ignorant" users with fairly basic needs. The traditional PC simply isn't a good fit.
  • bloggers are bad with numbers.

    " And now Gartner says that PC shipments will rise by a mere 4.4 percent in 2012 to 368 million units."

    PC market is saturated and a new good PC will last many years. 368 million is a really really big number, just maintaining that number year after year itself is a huge success...

    When business replace their desktops/laptops with ipad for full time work and when somebody can use iPad for serious developent then one can say this 'Post PC' has arrived. Until then ipads and similar tabs are mere toys.
    • More straw, no more bricks

      Not even the ZDNet bloggers, in fact not even the salesmen in the Apple stores, claim that -- except for a few outlier use cases -- people will be using iPads for full-time work. Tablets are not wbout full-time work. In fact the Windows tablets that the Microsoft people are building for full-time work will not sell very well for precisely the reason that tablets aren't suitable for full-time work.
      Robert Hahn
    • Saturated? I think not

      Millions of new consumers are entering the market every year courtesy of growth in Asia and South America.

      The PC isn't where they're putting their money.

      Win8 doesn't to have anything to help with this stagnation. MS is hoping for growth in post-PC devices. A questionable strategy.
      Richard Flude
  • Product life cycle

    Tablets are shipping because people don't have them yet. Most everyone has a PC, and so demand is limited to replacement sales. It won't surprise me if tablets soon start seriously taking over the PC consumer market, if someone starts offering fully functional docking stations that interface with the monitor, keyboard and mouse. Until then PC's and Tablets are complimentary products with some overlap.
  • 3 PC's sold for each iPad sold!

    By Apples own chart shown above you can see that 49.8 millions PC's were sold to 15.4 million iPads...a three to one ratio!

    The PC installed base is saturated, there's nothing wrong with a 4.4% increase. You would expect a larger growth rate in new technology so I'm not really sure what the point of this article is.
    • Market saturation versus massive piracy

      It appears the real problem is with massive piracy in the PC OEM business model especially in emerging markets including China and India.

      The attach rates for new PC licenses match new PC growth in developed markets but the attach rates for new PC licenses are way below new PC unit growth rates in emerging markets.

      Check out Steve Ballmer's trip to China in 2010 and his lecture at a University in Beijing complaining about massive piracy of MSFT licenses in the Chinese PC market.

      In reality, the revenue for Microsoft should be around $200 to $300 billion (about 4 times its existing revenue). This is because # of PC users in China matches that of USA but produces only 5% or lesser in PC license revenue. Same with India or Thailand or Vietnam or Africa. Microsoft annually loses some $100 billion on average due to piracy on its software products. And this is on average. New software product innovation should cause revenue to rise a lot more rapidly but it doesnt due to the same reasons.

      IP piracy or licensing piracy is not only a problem for Microsoft. It is a problem for USA.

      Apple is damn lucky that Apple licenses are never sold and only Apple devices are only sold. But this would also be the reason why Apple will never pick more than 1% marketshare in emerging markets.

      Practically all Apple revenue will always derive from America and Europe and it will be so forever.
  • "Netbooks were a disaster"

    I will agree, sort of. Intel failed to live by its own mantra: "Only the paranoid survive", and instead pushed out crappy CPUs from old precess technologies, just to milk more money from unsuspecting consumers. Partly as a result of that, ARM devices are attacking the low end and highly portable personal computer (not PC) market, first via the tablet route, and soon via what the netbook should have been from the beginning.

    The Ultrabook segment is better, but similar. Intel is hoping to sell high margin CPUs into this segment, but leaves itself even more vulnerable to "ARM attacks".

    I am afraid Intel (and of course Microsoft) have been hastening this "apocalypse" by their fear of abandoning their long standing high margin PC products. But that is how it always goes, as long as the markets are allowed to operate as they should. Apple had the vision and willingness to risk cannibalization of its relatively small notebook and desktop markets and is now reaping the rewards. If they are not careful however, they will suffer the same fate as Intel and MS eventually. You cannot milk a high margin business as a dominant player forever. There are just too many others wanting a share of those profits.
  • Technology transitions - enterprise versus consumer

    Well, my header may explain a thing or nothing!!

    It looks most blogger and techno-journalists seem to have all missed one thing on this so-called tablet revolution:
    It is a *fact* that the tablet developed from the smartphone developed by the same vendor and that causes this device to be used primarily as a mobile device. On top of it, it is a consumption device (as in consumer data or productivity or enterprise data or tv shows or movies or other video entertainment or even low-scale games). It has come to be a refined mobile device due to improvements in semiconductor aggregation capabilities in the last 10 years. This was an advantage or capability that was Intel's and then Microsoft's to lose.

    And all consumption devices by definition are fads. Like the Sony Walkman (costs < $10 in some cases), like the VCR, like the iPod (yes) and like a consumer PC (yes).

    What sells to consumers in most markets is not utility but simplicity. And Apple was right on to get this straight!

    As Microsoft, IBM, HP, Oracle, even Intel etc shore up more of their revenue and margins from Server computing and the so called Cloud, Apple gave up on their Server product and will give up their MacOS and Mac as well soon. Apple has created and rightfully owns the smart-device category - phone, tv, tab.

    The problem for Apple is that the Chinese (Lenovo et al) and the Koreans (Samsung) are great copiers. No offense meant on naming the nations here.

    Dell, HP etc cannot create the supply chain necessities to reduce the price of a laptop or a tab to match the Apple product and its features (the vertical versus the OEM model comparison) but Lenovo and Samsung will for sure copy the Apple products better than Apple can create new ones. So the party for Apple will not last long because the innovation gap will start to narrow soon.

    The only question is which OS will they have a few years from now - the Windows OS or the Android OS.

    It does look like Microsoft will sell atleast 20 to 40 million Windows 8 licenses to OEMs by end of this year 2012 and thats for tablets only.

    What will be interesting will be the breakdown of Microsoft's license sales -
    # of Intel PCs with new Win8 licenses,
    # of ARM tabs with new Win8 licenses (verticalized anyway or sort of),
    # of Intel tabs with new Win8 licenses
    to compare with Apples.

    I would think a sale of atleast 25 million Enterprise Tablet sales with Win8 will open new app share revenue and all sorts of SA license revenue for Win8 in the Business world. Coupled with new SQL Server, Exchange and Office 15 versions, this should lead to new use cases and enhanced Server and Tools and Business software division revenue and profits at Microsoft.

    Of course, this will pale in comparison to the enormous revenue and profit behemoth of Apple. But Apple devices are unmanaged and will remain unmanaged until Apple intends to introduce Enterprise features into iDevices which does not look likely. Which means they are always replacable next morning.

    Essentially an Apple device that replaced a RIM BB device will itself be replaced by another device when the time is right. The retention rate for an Apple device will be the same as that for a RIM BB device (5 years). I would predict the iDevice gap to narrow starting 2013 with other compatible devices (Amazon, Samsung, Lenovo etc). No wonder Apple has reduce the iPad2 price to $399 so market share can be increased at slightly reduced margins. This strategy can only continue so long as innovation continues.

    Essentially, iPhone 4S has LTE and iPhone 3 became cheaper and its sales increased. Same with iPad 3 and iPad 2.

    So what will be new from Apple in 2013? What can replace LTE when Carriers (ATT, Verizon etc) have been doing LTE Mobile Packet edge and core installations for the last three years?

    Essentially it takes years to produce new innovation in wireless communications technology and it also occurs in leaps and bounds with long lag between them. How will Apple innovate when the network does not innovate? I would think that is when the competition will catch up.

    My 2 cents.
  • Growth Share Matrix seems unheard of here.

    It is almost as though no-one has heard of the Growth Share Matrix at ZDnet or Techrepublic. The pc is a cash cow, it has low growth but much market share. To suggest that growth alone is able to provide a picture of the future is asinine.


    The truth is there is no driver towards pc replacement to push sales. If you are not a gamer - video editor or similar, then a P4 with Windows XP will do everything you want albeit a bit slowly. Until the next set of consoles appear there in no need to upgrade a gaming pc, which is great for consumer and value but no good for Intel. Even new os's do not drive hardware sales after all a pc from 2003/4 can run Windows 8!

    Will tablets take some market share? Yes, certainly but they are just Stars in growth potential at the moment. In time they will level off. Phones are smoke and mirrors because as many/most people get a new one an old one stops being used - sales totals do not reflect market growth.

    I just want to know if this is news to TR/cnet or if it is really them being trolls to generate conversation. One thing is certain the growth of other devices does not mean the death knell for the PC.
    • @ngurr: Growth Share Matrix

      Absolutely right! There must be atleast 4 billion PCs in the world now counting every sold PC device (Tower, Desktop, Laptop, Netbook) since 1995. And this excludes devices sold prior to 1995 from 1978. And every year the average # of PC units sold approaches the 400 million # which still grows around 4% CAGR rate accounting for an addition of atleast 20 million new units every year which is half the # of iPads sold annually. So for every 3 new iPads sold around the world, there is atleast one new PC device buyer (one can put it like that though they are not equivalent). And that for a very matured and existent market is actually amazing (contrasting with say the sales of Mainframe devices or Server units which see extremely low growth rates in what are already not huge markets).

      It does look like that forecasters and commentators mix the two - existing market growth rate with new market creation.

      I would think Microsoft is partly to blame for this since they themselves call the Tablet as a PC device. Their official spokesman always confirms that a Tablet is just a new form-factor for a PC. And this derives straight from their Windows Technical Architecture team which working cross-functionally has defined the same Windows platform to work across all sorts of form-factors in terms of device reachability and UI/UX and all sorts of use-cases too. Take a look here - Dave Cutler is now in their X-Box team trying to make X-Box PPC platform workable with Windows.

      I would actually think that Microsoft should have architected and marketed a tablet OS separately and simply called it Metro OS. Heck, they can even create a brand new market around the Metro device (with its OEM business model too) as a complement to the Windows device (main PC client device).

      It sounds good on paper to have a unified OS platform across all CPU platforms and all device form-factors. But time will tell if such a strategy can really succeed in the markets.

      I actually like the Metro UI and have even liked the Ribbon UI though I liked the one from Lotus Notes back in 1996 or 97 better, atleast initially. Microsoft does have great UI/UX design elements and expertise on their team. It is a pity that their marketing campaigns fail to show what they really have - like no marketing for Ribbon and no marketing yet for Metro except for Conferences.
  • 4% of many millions is not "mere" on any planet, except that of bloggers,

    who would insist spinning tablets into becoming replacements of PCs, when they're just, another form-factor, just like smartphones, and, as far as can be determined, smartphones aren't going to be replacing PCs any time soon.

    So, 4% growth has to be spun as "mere" by the bloggers, and sales of 368 million PCs need to be minimized in order to make the iPad seem like the second coming of Christ.

    Geez! Most people in the real world are a lot smarter than to scoff at 368 million units as being meager, or that 4% growth of a huge number is insignificant.

    Most people who make PC and tablet purchases aren't interested on the bloggers' preferences or on their spin. Most people simply want to purchase something that gets the jobs done for them, and while tablets might serve some people quite fine, others won't even think of a tablet as being capable enough.

    What the tech blogger atmosphere needs, is more maturity in the writing and less in the hype and spin. Grow up you people!