Death or rebirth: What does the future of the PC really look like?

Reports of the death of the PC have been greatly exaggerated, but big changes are coming and soon.
Written by Steve Ranger, Global News Director

Microsoft's Surface is one vision of the future of the PC.

Image: Microsoft

When it comes to technology, nothing really goes away - or at least not for a very, very long time.

One example - a couple of years back, someone swore to me that they knew of at least one system in use that could still calculate in pounds, shillings and pence -- which meant the code must have have been somewhere around 45 years old and still running unchanged.

So it's unwise to predict the imminent death of any particular technology. And it's even more unwise to predict the death of the PC in particular, which had been done many times before.

But it's also generally accepted the PC is no longer the primary computing device for many, particularly consumers.

According to analyst Gartner, worldwide sales of traditional PCs (desktops and notebooks) have fallen from 343 million in 2012 to somewhere around 232 million this year; revenue has dropped by an incredible $97bn from $219bn in 2012 to a predicted $122bn this year.

Image ZDNet, data from IDC.

Sure, some of this is down to some short term economic factors - low oil prices and political uncertainties which is hitting spending in markets like Brazil and Russia. Windows 10 arriving as a free download has probably given some a reason not to buy new hardware too. But the longer terms trends are clear: we are simply not buying as many PCs as we used to, because we are not using them as much.

Microsoft's vision was to put a (Windows) computer on every desk and in every home. It pretty much managed it, at least in the richer parts of the world. But many of those PCs - especially the ones at home - are now forgotten and covered with dust.

That's because smartphones and tablets are easier and quicker to use, and can do the vast majority of things you can do with a PC. Indeed there are plenty of things that a standard PC or laptop cannot do that a smartphone can.

To put it another way: PC makers have struggled - and most failed to answer the question posed by Apple CEO Tim Cook last year: "Why would you buy a PC anymore? No really, why would you buy one?"

Now this doesn't mean the PC is dead: selling 232 million this year shows that (and yes, I wrote this on an PC and businesses will remain a stronghold for the PC). But it does mean that the PC is going to change, and so will PC makers.

Your PC is already not your father's PC anyway: that beige box with a floppy disk drive has been replaced with a sleek notebook that splits into two or does other kinds of gymnastics as required. And there's more of that change to come.

Here's a few ideas for what will be changing in the next few years.

1. Follow the margin: According to Gartner in a declining market what is calls 'ultramobile' is a still an area of growth - so expect to see more cool hybrid devices with a fancy price tag. The analysts expect revenues for these luxury devices to hit $34.6bn - up 16 percent from 2015, and it could be the most lucrative segment of the PC market in revenue terms within three years. Why? Because on a cheap $500 laptop the margin is about five percent - $25. On a $1,000 PC that margin is more like 25 percent - or $250.

2. Gaming gets serious. For the same reason - chunky margins - PC makers are going to go after the gaming. It's a small market for sure with only a few million devices sold each year, but gaming PCs start at $850 and easily go up to $1,500 for a premium model.

3. PC makers will diversify even further. Many mid-tier PC makers are struggling with tiny margins or are on the verge of quitting the market altogether. One option, for those that can, is to spread the risk by making PCs just one part of a broader business: that way selling PCs becomes a good way of getting a foot in the door to then sell the more expensive enterprise gear.

4. PC makers turn to services. The Internet of Things could help PC makers find new ways of making money and keeping customers happy: for example Gartner said vendors could use sensors to detect if a battery is getting too hot or a hard-disk drive is being overworked - and they could send an alert to customers to get PCs checked out and components swapped before they blow. Services like this could add to revenue and customer loyalty.

5. PCs will become more like smartphones. This is inevitable as most people's standard computing device becomes the smartphone. It will happen in a few different ways and we're already seeing the beginnings of it: the move to an app store experience in Windows 10 for example, or the rise of Chromebooks which assume most of the heavy processing and storage will be done though the cloud. That means from a UI design and back-end engineering point of view most PC applications will gradually become much more like apps.

There's even a chance that - if something like Microsoft's Continuum takes off (Canonical has talked about something similar) that PCs may even become smartphones: or should that be the other way around? Whichever it is, PCs aren't going away for decades, but they're going to become just one option among many, hidden behind newer technologies - smartphones, wearables, virtual reality and more. PCs will gradually retreat into a niche, but it will be decades before they disappear.

How do you think the PC is going to change in the next decade? Have your say in the reader comments.

ZDNet's Monday Morning Opener is our opening salvo for the week in tech. As a global site, this editorial publishes on Monday at 8am AEST in Sydney, Australia, which is 6pm Eastern Time on Sunday in the US. It is written by a member of ZDNet's global editorial board, which is comprised of our lead editors across Asia, Australia, Europe, and the US.

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