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Welcome to the New Era of Personal Computing

These are remarkable times to be a gadget lover. Between the iPad mini, Windows 8, and the forthcoming Windows Phone 8 and new Android tablets, personal computing has been revolutionized in a matter of weeks.

October 29, 2012

In all my years of covering the PC market, these past few weeks have been possibly the busiest ever, packed with industry announcements that could transform the computing landscape entirely. Last week, we welcomed Apple's and the official launch of for tablets and desktops. This week, we get Windows Phone 8 and new Android tablets from Google and its partners.

As Microsoft launched its new Windows 8 OS, which finally brings touch to the Windows PC market, I could not help but wonder: are we actually seeing the end of the PC as we know it and the beginning of truly personal computing?

I don't for a second believe that PCs are going away but forecasts suggest annual PC sales, which grew in leaps and bounds in the past, will plateau around 300 to 350 million from now on. It's still a good business but there isn't much profit to be made in the industry anymore. Also, if content and apps move to the cloud, today's high-powered PCs and laptops might even be overkill in many office and personal settings.

Even back in the early days of the PC, I never really felt that the box we had in 1981 was really personal. In fact, my battleship grey desktop was anything but personal. In the office, many used it and at home, the family took control of it more often than I did.

In my opinion, the computer didn't become somewhat personal until a decade later when laptops came to market. Even then, the laptops of those days were bulky and many others in my office used mine as well. It was only when I saw the first smartphone, the original Handspring Treo, did I get a sense that computing was finally getting personal. In fact, today the smartphone is exclusively personal in almost every case and since it has a CPU, memory, wireless, and an OS, it is just as much of a PC as the desktop or a laptop is today.

Two weeks ago, Salesforce.com CEO Marc Benioff made a rather interesting statement; he proclaimed that Windows 8 "will be the last PC OS Microsoft will bring to market." Now, I am aware that Benioff is not fan of Microsoft, but he has a legitimate point. It's conceivable that as clients get thinner and smaller, the need for a powerful OS for desktops and laptops use should decline. Also, there will be a time when the browser is the OS, the key reason that Google has put so much time and energy into .

It is easy to argue that smartphones will be the largest segment of the PC market, as they are based on a one-to-one model. Although 1.3 billion cell phones are sold each year, almost all researchers say that by 2015, the smartphone will dominate the cell phone market. The smartphone PC is the one computing device people take with them everywhere. It fits in a pocket or purse and has become, interestingly enough, the PDA (personal digital assistant) Apple envisioned when it introduced the Newton Message Pad in 1993.

And while Apple is selling a record number today, Android smartphones from more than 30 vendors are also becoming a mainstay in the market. Microsoft certainly wants a cut of this action. That is why its Windows Phone 8 event this week is so important. While the company is a distant third in the smartphone race, Nokia has made a major commitment to it and I believe that Microsoft will bring out a smartphone of its own to try to expand the market for its Windows Phone 8 OS. Apple, Google, and Microsoft all want to dominate the smartphone operating systems of the future and the impending fight will be fierce.

But the most disruptive new PC is clearly the tablet. Apple has sold 100 million iPads to date and owns about 65 percent of the tablet market. Perhaps more importantly, the is the gold standard in 10-inch tablets and all the competitors are having a tough time playing catch up.

In fact, the only other company making progress is Amazon and that is because it ties its to its ecosystem of products and services, much like Apple does. Google is also trying to build out a robust services offering and, over time, Microsoft will do the same. However, Apple has at least a two-year lead over all of them and is not likely to stop innovating, thus keeping the competition in its wake.

Again, Apple's new iPad mini sets the bar for all 7-inch tablets and, ultimately, will force the competition to improve design and quality. But at least one competitor I talked to was pragmatic about the iPad mini launch. It is taking the "rising tide floats all boats" approach, hoping that the iPad mini will actually introduce tablets to a broader audience and eventually will help it also.

While tablets did not catch the PC guys off guard completely—Dell, HP, and others have had tablets in the market since 2001—their bet on Windows Tablet Edition never paid off. What did catch them off guard, though, is the concept that tablets and smartphones are actually front-ends to consumer services like movies, music, games. They never even thought to build a consumer services offering and now they are paying for it. In fact, this is why Dell and HP are putting more effort in servers and IT services; it is impossible to try to compete with Apple, Google and Amazon at this point and they know it. Their only hope is that Microsoft can create a set of services that rival what Apple and Amazon offer and piggyback on it if and when it ever comes out.

In the meantime, tablets are eating into PC and laptop sales, which is one reason that predicted PC market growth will be less than five percent from now on. Yes, IT shops will continue to need to upgrade PCs, but consumers balk at the idea of buying expensive desktops or laptops. In many cases, they default to tablets instead. The tablet market will grow by at least 200 percent in the next two years and by 2014, they will outsell PCs on an annual basis.

These are remarkable times to be a gadget lover. We now have more computing power in the palm of our hand than NASA had when it sent a man to the moon. Innovation continues at lightning speed. If you sit back and look at the announcements over the last two weeks, you can see that they collectively have the potential to reshape the PC, tablet, and smartphone markets for years to come.