There are three things every reporter covering computer hardware and electronics can count on:
1. Apple stories are a sure way to generate interest, hits and controversy.
2. Moore’s Law will continue.
3. You will regularly be asked to write the “The PC is Dead” story.
My boss at CNET made the idea of doing an obituary an annual Kabuki ritual. He’d come to my desk, share sudden realization, and ask that a big feature story be published in three days.
Then we’d look at the Gartner at IDC reports, which were eerily as regular and predictable as my boss’s pronouncements. Prices declined over the past year, some vendors (Zenith, Packard-Bell, Compaq, Gateway, AST, etc.) declined precipitously, but shipments magically went up.
The debate comes up again with the most recent numbers. PC Shipments came to 352.4 million in 2012, 3.2 percent lower than the year before. And shipments grew by only one half percent in 2011. Flatline.
PC shipments have actually only declined three times since research firms began counting them: in 1985, when the industry was only a few years old; in 2001, in the first, painful phase of the dot.com hangover; and in 2012.
It’s an unusually consistent record. Shipments grew during both the 1990-1992 recession as well as during the most difficult years, 2009 and 2010, of the current economic malaise. Shipments also grew despite lengthening replacement cycles. Check out the chart, composed of Gartner’s numbers, compiled by Wikipedia on this page. It only goes back to 1996, but you get the sense of the ongoing expansion.
So are the good times over? Skeptics do have some fairly strong arguments. A number of the growth spurts in the past came from what could be called one-time events. Computers represented a evolutionary leap over typewriters and Dictaphones, creating an instant market. The dawn of the commercial Internet led to a household explosion in electronics. Remember “Encarta”? It is hard to imagine that gadget fever would have gripped the world if everyone was still shopping for disks.
Laptops and WiFi transformed computers into traveling companions. Rapidly declining prices opened the market to new households while homes that already had PCs thought nothing of having three or four under the same roof. Emerging markets in Asia and Latin America propelled sales too.
There’s no worlds left to conquer, in other words. The public, moreover, has discovered tablets.
But look at the numbers again. The 2012 total of 352.4 million comes to more than double the 168.9 million shipped in 2003 and more than three times the 113.5 million shipped in 1999. It’s even about 50 percent larger than the 239 million computers shipped in 2006. It's like the auto market: shipments might shift yearly but growth will probably continue and the sheer size means any shifts will translate to large numbers.
Windows 8 is not igniting customer demand, but Windows upgrades haven’t played a dominant role in demand for years. Consumers buy new computers because they old ones get damaged or they need more performance in the same way you might buy suits at a regular clip to replace ones that are starting to look a bit haggard.
Tablets? Tablets are PCs in a slightly different form. Many of the main tablet vendors make notebooks as well. Thus, in some ways you could add a solid portion of the 240 million tablets expected to ship this year to the numbers above. But more importantly, look at where the growth is occurring. Tablets with 7- to 8-inch screens-electronics books, in other words—will account for 45 percent of the market. The 9-inch and above segment—the ones that could replace notebooks--are shrinking from over 80 percent of the market in 2011 to under 50 percent. Tablets, in other words, aren’t displacing notebooks. They constitute a lateral, complimentary market. Built-in keyboards are handy.
A few more titanic one-time events in the form of cloud computing and the Internet of Things have appeared on the horizon. Fifteen years from now, people will write how your light bulb contains more processing power than your first cell phone. And who will benefit from this surge? A lot of familiar names. Margins may not be as high, but the volumes could be spectacular.
The death, thus, might be greatly exaggerated.
