Those who dominated the past three decades reveal weaknesses in markets that have made Apple the most profitable IT company. Should we make plans for the funeral of the PC?

The impression is certainly there. Microsoft had record revenue thanks to its Office business, server software and the Xbox 360. Windows, however, suffered from the third consecutive quarterly revenue decline. Is the market moving away from PCs and toward tablets and smartphones? Possibly. And what about Intel? Record revenue – the fifth record in a row – and net income that overshadows those glorious and hugely successful dotcom years. However Atom revenue and shipments are down and investors were disappointed, sending the stock down after the earnings announcement. It’s nothing unusual for Intel. I actually can’t remember the last time financial advisors and investors were jumping up and down in a similar way as they do over an Apple rumor. In all seriousness, Apple (or ARM) has still no competitive tablet processors, even if I am hearing that we should be seeing a significant announcement at IDF – sources at Intel claim that Intel CPUs will blow ARM out of the water. Given the success we are seeing at Apple, our negativism toward the PC and exaggerated expectations for the tablet, is it time to thank the PC for its service and simply say goodbye?

The Worst Case Scenario

If you have read my columns before, then you already know that I doubt that the tablet is what it is cracked to be. As long as Google and Android tablet makers keep shooting themselves in the foot, the tablet market will remain an iPad market. What we are seeing in the market today are largely unfinished products that are positioned wrong and ignore most lessons Apple should have taught them. For those who don’t want an iPad (yet), the only option is a (mobile) PC. Until there are competitive tablets out there, the threat to the notebook is somewhat contained.

Let’s also remember that about 400 million PCs will be sold this year, more than 225 million of them will be notebooks. Apple could be selling somewhere between 40 and 50 million iPads, which is pretty scary to PC makers, but then we also know that Apple has done its homework very well, better than PC makers have done theirs, and is harvesting the fruits of hard work. The most optimistic tablet shipment forecasts currently foresee about 220 – 250 million shipped tablets by 2015. These numbers indicate that the tablet may not be outselling the common PC anytime soon.

Also noteworthy is the fact that tablets and PCs have very different usage models. While the PC is much more a content creation device, the tablet is a content consumption device. In other words, the tablet is a lean-back device (if you imagine a scenario of using a tablet in a Starbucks), while the notebook is a lean-forward device. The ways we are using a notebook and tablet are not the same and it is unlikely that this will change in the next few years, unless one of two is able to bridge the gap to the other and destroy the opponent’s market.

Does it make sense that PC manufacturers squeeze into a market that is defined by Apple and the only opportunity is not to lose contact to the latest iPad. Possibly, for some. However, what would lead us to believe that the traditional PC is dead? Clever marketing? Bias? Hysteria?

The World In Your Hands

Let me revise my headline above. There is hope left for the PC. In fact, the market has never really changed, with the exception that Apple has created an incentive for PC makers to be creative again. Let’s be serious, with the exception of faster processors, form factor experiments and different colors, the PC is essentially the same it was in 1975 when Bill Gates had the vision of making a PC mainstream. 20 years later, Windows 3.11 made the PC mainstream and Microsoft carried the same excitement on its shoulders Apple has today. 15 years after Windows 95, we are still using a keyboard with a screen in front of us, despite decade-long promises of voice input and annual sci-fi presentations how the PC would look like five or ten years from now.

In a way, you could say that PC makers should be grateful that they had a 15 to 20 year run with a product that virtually changed itself on the inside, but effectively has not changed much since its invention. Just like Microsoft had a big vision in the 1970s, 1980s and 1990s, Apple had it the 2000s and is running with it. As a PC maker, you have now the opportunity to be simply another company that is following the pack. If you are taking risks, you have an opportunity of becoming the next Apple. Famous technologist Alan Kay once said “The best way to predict the future is to invent it.” I firmly believe in this statement. Apple is embraces it every day and has based its success on it.

The Future Is What You Make Of It

Claiming that there is no hope for the PC is silly. It is under pressure, but it is far from dying. What the PC needs is a good dose of innovation and not another iteration of “look, I am thinner and faster!” The PC needs believers and risk takers to experiment and invest in new ideas.

What could make the PC exciting again – so exciting that people are willing to wait in line for it? Do we have to change the data input model? Is the time finally ripe for voice input? What are the opportunities of 3D, an area that has conceivably just been scratched so far and is not seen with a truly innovative vision that is so compelling that we would actually want to go out and buy it? What about the next generation of a superphone that would integrate truly new features – such as Mozilla Labs’ Seabird phone? What about the platform experience? How can applications evolve with HTML5 into a new area of usability? What about the idea of a platform that is so simple to use that people can build and customize their applications to fit their individual needs? If there is one company we believe can answer those questions, it is Apple. But there is no reason why anyone else could not do the same.

As the computer has moved to become a commodity, old values such as core hardware features have become largely irrelevant to those who represent the mainstream market. Does anyone care what processor and how much memory is in an iPad? Do people care that Apple’s notebooks do not come with Intel’s fastest processors? Exactly.

The PC is due for a major innovation push that is beyond new colors. The iPad is merely a milestone in the evolution of the PC and it will be succeeded by the next great idea. In fact, if you think about the opportunity, there may have never been a greater opportunity for PC makers than today.

Source:http://www.tomshardware.com/news/tablet-pc-notebook-desktop-innovation-3d-voice,13121.html