The PC industry is heading for collapse

The PC industry is heading for collapse

Summary: Two enormous warning signs that the PC industry as we know it is eroding away from under the OEMs.

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TOPICS: Hardware
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Over the past few days I've talked a lot about how we're leaving behind the PC era and moving instead to a 'post-PC' era. One consequence of a shift away from the traditional PC towards devices such as tablets and smartphones is that the people will need fewer PCs. And PC makers better be prepared, because the entire industry is heading for a collapse.

Horace Dediu of Asymco and technical writer Jeremy Reimer have pulled together extensive historical data which covers the rise (and fall) of computing platforms since 1975, including the PC.

There's are several aspects of this chart that are worth noting:

  • The sustained pressure that the PC has been under from new platform over the past decade, after pretty much having the 1990s all to itself.
  • The insane growth that platforms such as the iPhone, iPad and Android have experienced over the past few years.
  • Despite what you might hear and read elsewhere, the iPad is not a niche device. As Dediu points out, after less than two years enough units have been sold to put it within an order of magnitude of all PCs sold. That's incredible growth.
  • Android phones are doing much better. We can easily expect Android handsets to outsell PCs by the end of the year.
  • New platforms such as the iOS and Android have represented the first real challenge to the dominance of the PC since 1991 (where the PC was put under pressure by Macintosh and Amiga.

If we take a look at a second chart which shows market share over time, we can begin to see just how disruptive the combination of Android, iPhone and iPad have been, pushing the PC market share to under 50% in a few years.

So, PC shipments are flat-lining, and the market share of the platform has fallen to below 50%. Those are two enormous warning signs that the PC industry as we know it is eroding away from under the OEMs. It's no wonder that the OEMs are desperate to break into the tablet and smartphone market and capture just a little of that market share back.

Is this a permanent collapse or just a blip? Well, historically we're in uncharted territory and we've got nothing to go on (the blip of 1991 was much smaller and shorter). Judging by the scale of the collapse this time, and the fact that we're not seeing much in the way of innovation in the PC market (I don't see touch, ultrabooks and Windows 8 being enough to turn the tide), it's hard to see what OEMs or Microsoft can do to stimulate PC sales. There's little wriggle room with respect to pricing either, with OEM margins already razor thin. And the problem with collapsing sales and tight margins is that there's even less room for innovation, which in turn further dampens sales.

The 'post-PC' era is coming ... and much faster than we might have anticipated.

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Topic: Hardware

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139 comments
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  • The Personal Computer industry is not

    headed for collapse.
    My desktop is a PC.
    My "tablet" is a PC.
    My mobile phone is a PC.
    My laptop is a PC.
    davebarnes
    • RE: The PC industry is heading for collapse

      @davebarnes You are right. It is just different packaging. They all compute and are personal devices. Their usefulness depends on the user's needs.
      bobfastner
      • NO!

        @bobfastner

        There is a BIG difference between a personal computer and a PC. Tablets and smartphones are personal computers or computing devices, but they are NOT PCs. A PC is a fairly specific type of device.

        Also, a Mac is a personal computer, but NOT a PC
        D.T.Long
        • PC

          @D.T.Long

          If you are old enough to remember or even used one (Me), this is a PC.

          https://en.wikipedia.org/wiki/IBM_PC

          This is your brain on drugs:

          https://en.wikipedia.org/wiki/Fried_eggs

          A mind is a terrible thing to waste.
          Dietrich T. Schmitz *Your
      • Can you show me the "universally" excepted definitions

        @D.T.Long...of Personal Computer vs PC?

        Pagan jim
        James Quinn
      • A Mac is a Mac

        Contrary to MS fanbui revisionist theory.
        ScorpioBlue
      • Simple: 30 years of history and common usage

        @Pagan jim

        So I guess in your world a Mac is a PC? All the ridiculous fanboi posts here are just a figment of my imagination?
        D.T.Long
      • RE: The PC industry is heading for collapse

        @ D.T.Long<br>so, uh, how do you define this PC beyond specific device?<br>And what ridiculous fanboy posts are you referring to? From the cult of softies? From the Androidites? From the iFans? From the Linuxloyals?
        oneleft
      • Clever as your response to my question was and it was:)

        @D.T.Long ... It still did not provide me with two unique definitions of what is excepted by say Websters to be one a Personal Computer and two a PC.

        Pagan jim
        James Quinn
      • It's Not Really Difficult

        @Pagan jim<br>It's not really difficult. The IBM series of computers that were launched way back when were called IBM PCs (remember the old ad campaign with a Charlie Chaplin imitator for the first home line of computers called the PCjr (junior))? So at the very least whether PC might possibly be just an abbreviation for personal computer (as I sometimes see it used), or a term meaning the line of IBM PC compatible computers (more often) is a matter of context. In this context, PC is a reference for the IBM PC compatible series of computers.
        CFWhitman
      • And what did the "PC" in IBM PC stand for?

        @CFWhitman... Did it not mean Personal Computer? Wasn't that part of the pitch?

        Pagan jim
        James Quinn
      • That's Immaterial

        @Pagan jim<br>It doesn't matter that IBM adopted the name because it was a reference to the phrase "personal computer." Since they used the name "PC" for their product, you have to be willing to accept the possibility that the name will be used to refer to that line of computers.<br><br>That "PC" was a reference to "personal computer" for the original name of the product is no more relevant than the fact that there are a lot of macintosh apples sold that have nothing to do with computing at all, though they taste pretty good.
        CFWhitman
      • Yes.

        @D.T.Long

        PC = Personal Computer.

        A "Mac" is a [b]personal computer[/b] built by Apple.

        A "Windows PC" is a device previously referred to as an "IBM PC", meaning a [b]personal computer[/b] either built by IBM, or compatible with IBM's PC architecture (i.e. "IBM clones", "Wintel"), that uses a Windows OS.

        A "Linux PC" is a [b]personal computer[/b], usually a Wintel/x86/x64 machine, that uses a Linux OS.
        spdragoo@...
      • Well, not really. Otherwise, your car, and the nearest 747 are both ...

        @bobfastner ... PCs.

        The term 'PC' is really the short-name for the long-forgotten "IBM PC". Today, most people say "PC" to mean a Windows-based personal computer, as opposed to a Macintosh personal computer but, I suspect, in this case, Adrian means BOTH!

        It is true that most people use their personal computers for browsing, e-mail, music, and photos. (This is probably over 90% of the use.) Word processing and spreadsheets probably come in second and bookkeeping (e.g. Quicken) and tax preparation (e.g. TurboTax) probably come in third.

        In the last few years, the processing power of smartphones and tablets has made it possible to meet that 90% threshold without having to own a personal computer. Smartphones usually come in at sub-$200 price-points when they are combined with a two-year contract so there is a considerable price-advantage over a personal computer (which now starts at around $400). After two years, most users are willing to lay down $200 for a new smartphone while owners of personal computers will wait three to five years before replacing their device.

        That said, the professional user (road warrior, if you will) will buy ans a tablet or e-reader and he will own a smartphone but her cannot/will not give up his personal computer. Neither will the enterprise. So, until we know more about how well Windows 8 will fare, I think it is naive to suggest that the Intel-based Personal Computer (Mac or Win) is going belly-up any time soon.
        M Wagner
      • Oh woe to the PC industry

        @mwagner | spdragoo
        [i]So, until we know more about how well Windows 8 will fare, I think it is naive to suggest that the Intel-based Personal Computer (Mac or Win) is going belly-up any time soon. [/i]

        Your comments are a pretty fair assessment. The reach, definition and mishmash of semantics around all of these devices is becoming increasingly blurred, and thus difficult to finger with absolute precision. To each their own and whatever it takes, baby, to meet your unique computing needs.

        As for the impending PC "collapse," just ask yourself if you wouldn't mind inheriting the OEM's waves of "troubles," as they swim along like pudgy guppies in a boundless sea of loot. They'll morph and adapt just as they've always done, then determine the markups necessary to push their devices.

        Regarding the current headlong rush to small form adoption, how many homes will suddenly forego their next obligatory big box? You know, to get real work done, in full screen trimmings. Right, next to none. And if that isn't enough, there's a largely untapped third-world out there sporting virgin playing fields left to [s]pollute[/s] [s]enslave[/s] connect.
        klumper
      • RE: The PC industry is heading for collapse

        @D.T. Long What part of [b]P[/b]ersonal [b]C[/b]omputer do you not get? PC is NOT a wintel system but a Personal Computer. A Mac system is still a PC. A Linux system is still a PC. A DOS system - yup, still a PC.

        Sure one can point to the IBM PC as a specific device but that does not mean that no other system is not a PC. Otherwise any current wintel system is NOT a PC.

        So YES long story and mini rant short a Mac IS a PC.
        athynz
    • RE: The PC industry is heading for collapse

      @ D.T.Long
      so, uh, how do you define this PC beyond specific device?
      And what ridiculous fanboy posts are you referring to? From the cult of softies? From the Androidites? From the iFans? From the Linuxloyals?
      oneleft
    • RE: The PC industry is heading for collapse

      @davebarnes
      I guess Adrian thinks the world is ready to go back to soup cans connected with string and carrier pigeons.
      bunkport
    • RE: The PC industry is heading for collapse

      @davebarnes

      On the basis of your definition, if I told someone that I was going to give them a free PC, I could supply any of the stated devices. I think not! Common use of the parlance would indicate that a PC refers only to a desktop computer. The other devices have PC-like capabilities, but those are not PCs.
      Wakemewhentrollsgone
      • RE: The PC industry is heading for collapse

        @Habiloso
        Well said. ;-)
        Oddmoore