18 October 2012

The Post-PC World?

With everyone now claiming the death of the personal computer, it is hard to swim against a moving tide.  According to a recent WSJ article, PC shipments may have hit its peak and actually decline this year for the first time in history.  Dell and HP stock prices are at ten year lows.  Tablets, phones, and all things smart have been growing at a torrid pace.  All signs point to the inevitable end of an era; so why, then, am I so skeptical? Is the Atma Business Blog trying to "party like its 1999"?

Make no mistake, PC manufacturers are being squeezed and will continue to be so.  On the one end there is mass move to smarter, smaller devices.  On the other end, Asian manufacturers such as Acer and Lenovo are dropping prices and stealing share from incumbents.  In the enterprise space, cloud based solutions and the growth of data centers is diminishing the need for computing capacity on a local level.  We're not dealing with a growth story here.    

However, the buzz for the new devices is probably overdone right now since they are in the early stages (remember when PCs were supposed to replace servers?).  Even in today's "smart" world, PC's are still the most intelligent devices out there.  PCs provide more computing power, storage, and access to software applications.  Tablets have great functionality but do less.  Whether it be enterprise level data mining or consumer internet shopping, the need for horsepower and the desire to do more will continue to grow.  Also, as I alluded to in a post a few years ago, we will not be satisfied with keeping all of our valuables exclusively in the hands of third-party cloud providers and will require some level of local storage . 
Tablets and other gadgets are nice to have but seem to be incremental to PCs.  Mass use of the internet is still best done on a PC.  While Twitter gives us instant information, it is no substitute for the New York Times. Good luck trying to utilize your CRM or ERP system in a meaningful way through a tablet.  And to this day, software "apps" like Powerpoint are head and shoulders above iOs "apps."   Perhaps households and corporations will need fewer PCs in the future, but I don't they can get by without them. 

What will change is how tomorrow's PCs will look and who will bring them to us.  To this day, I still can't figure out how HP and Dell missed tablets and smartphones.  How did Intel give away low power processing chips to ARM ? Certainly Innovator's Dilemma was at play.  Perhaps manufacturers like Samsung or Apple who seem to have successfully changed their products with the times will continue to gain share.  There also seems to be an unmet need in which new players could emerge through innovation.

Expect a convergence of the things we like from a PC with the UI and ease of smart devices.  Today's gadgets appeal to our "wow" need rather than taking a comprehensive approach.  The need for intelligence and personal computing will continue to rise and tomorrow's PC's will need to reflect that need. The next generation will be more robust and remain the center of our computing needs.  Call me crazy, but  I wouldn't be surprised to start seeing VC investment into the next generation of PCs. And perhaps those entrepreneurs will take their sales pitch on the road in their little red corvette.