New Life for PCs

by Bob O'Donnell   |   August 12th, 2014

After having been written off as dead more times than I can remember, it seems the PC industry is staging a resurrection of sorts, driven by both businesses and consumers starting to realize that PCs are still useful devices that they’d like to have around. Not only are we starting to hear more positive news about shipments and forward-looking business from big players like Dell, HP, Lenovo, Intel, AMD and others, there’s even news around innovations and advancements within the industry.

Intel yesterday reminded the world about how it continues to drive impressive improvements in process technology and CPU architectures with announcements around its 14 nm Broadwell-based Core M CPU. The chip, which is specifically designed for 8-10 mm thick 2-in-1 and ultrabook-style PCs, is expected to offer solid improvements in performance and, more importantly, even lower power requirements for the entire system. By taking a pragmatic approach to the design process, where they started outward from the finished system and moved inward to the chip, they’re enabling super-thin, lightweight, fan-less PCs that are optimized for power at every possible level. The end result should be some very sleek, sexy designs that finally “really” deliver on full-day, everything on, everything connected PCs by this holiday season.

Another big PC-related story came via nVidia and Acer, who debuted a Tegra K1-based Chromebook for $279. Chromebooks themselves have been one of the surprise hits in the PC industry over the last year or so, particularly in the US education market. In many cases they are replacing tablets, as schools have become concerned both with the high cost of tablets and their lack of a keyboard, among other things. Plus, to see nVidia bring their new CPU architecture over to a clamshell-based design demonstrates their awareness of the new type of value they can provide in a business that has been at their core since their founding.

And just to keep things interesting, we even have a back to the future marketing campaign that just launched with Microsoft taking on Apple in a Surface Pro 3 vs. Macbook TV ad. Yes, it’s 2014 and Microsoft and Apple are still fighting over the PC business…kind of fun and kind of amazing.

The consistent theme running through all of these is familiarity, but with a new twist. After all, Intel has been trotting out new CPU designs for a very long time; Acer is known for targeting lower-end PCs; nVidia’s graphics processing prowess is widely acknowledged; and it seems, at some level, Apple and Microsoft have been battling each other forever. But in each case, there are important new twists and developments that suggest companies, and indeed an entire industry, that is working to reinvent itself for the modern mobile era.

To be sure, we’re far from being in a new golden era for PCs. But, we’re also far from seeing an extinction of the species.”

To be sure, we’re far from being in a new golden era for PCs—there are still many challenges ahead and some of the recent positive news could turn out to be somewhat short-lived. But, we’re also far from seeing an extinction of the species. Instead, we’re seeing a maturation of viewpoints, an acknowledgment of reality and, arguably, an evolution of the species. The process hasn’t always been easy or pretty, but as time passes, it seems increasingly clear that PCs, in some form, will be around for some time to come.

As I’ve demonstrated in previous columns, PCs are still being actively used by all consumer age groups; they continue to be the dominant productivity devices in businesses of all sizes and they’re still in demand by many consumers. Many in the tech press and blogosphere would have had us believe that most people were going to (or already had) suddenly abandon(ed) their PCs for tablets, and the old clunkers were never to be seen again. But the facts simply do not support this view. The change process across the majority of mainstream users usually goes much slower than those on the cutting edge expect it to, and that has clearly been the case with PCs.

In fact, given the expected boom in larger-size smartphones, pairing a convertible PC with one of those large phones could prove to be exactly the combination that many in the mainstream will start to move towards. And if they do—and I expect they will—it should continue to breathe life into PCs for the foreseeable future.

Bob O'Donnell

Bob O’Donnell is the founder and chief analyst of TECHnalysis Research, LLC a technology consulting and market research firm that provides strategic consulting and market research services to the technology industry and professional financial community. You can follow him on Twitter @bobodtech.
  • Recision

    Hi Bob,

    While I won’t quibble with your final conclusion, I would highlight a couple of things from further back in the article: “there are important new twists and developments that suggest companies, and indeed an entire industry, that is working to reinvent itself for the modern mobile era… To be sure, we’re far from being in a new golden era for PCs—there are still many challenges ahead and some of the recent positive news could turn out to be somewhat short-lived.”

    One of the other websites I regularly visit is ‘SemiAccurate’ – http://semiaccurate.com

    Several recent articles from there are very enlightening(i.e. the realities of 14nm, or 16, 20 22) For sure there is a lot of attempts at new twists and developments… but there is still a lot of smoke and mirrors going on as well. The Tech industry just can’t seem to ever throw off it’s legacy and habit of trying to confuse us with b/s and (b/s)science.

    No-one will ever accuse IT marketing depts of telling the truth, the whole truth, and nothing but the truth.

    While the vapour-ware and over-promising continues, the PC industry will always struggle against headwinds of its own making. And the market will continue to buy – on sufferance – while they don’t have any other choice… right up until they don’t have to any more, if they finally do have another choice.

    Your “big players like Dell, HP, Lenovo, Intel, AMD and others”, can yet fall very fast – witness what has happened to Nokia and RIMM.

    • Bob O’Donnell

      Yes, the idea of stretching technical details is nothing new to tech, but it’s certainly not unique to PC players. Those involved with mobile phones, tablets and other tech products are all likely easily as guilty. Your final point is a valid one and it’s still possible we’ll see consolidation in PCs, but again, I think we’re likely to see some consolidation in mobile players as well.

  • Kenny

    The all in One PC as you known it Bob is dead,
    the PC has unbundle in several categories for specific uses case, which offer a better experience at a lower price.

    what we have nowadays is computer in many form factor, Smartphone for mobility, Tablet for media consumption, Video Game for game, Set top Box or smart TV for your living room, Chromebook for you web platform, wearable for Notification, and traditional PC for work,
    all of this offering compete directly with the sales of traditional PCs, that was originally used for these types of needs. hence the value today is in interconnection, Apps and services,

    the way forward for any OEM is not to try to create the perfect PC, rather to provide a good offering in each category that compete with the traditional PC with some good Application or service that connect them all together.

    • Bob O’Donnell

      While I agree that computing has bifurcated into many device types, I disagree that traditional PCs are dead. As I’ve written about before, I have clear, current evidence from real-people in 4 countries around the world that PCs are still used on a very regular basis for a wide variety of activities While it’s true that some of the activities that used to be solely done on PCs now also occur on other devices, that doesn’t mean people have stopped doing them on PCs. So, we’ll have to agree to disagree, but I believe PCs are here for some time to come.

      • Kenny

        Traditional PCs is not dead, they just no longer the first choice of most consumers who want to buy a computer.

        • jfutral

          Right. Or put another way, the PC is not the _only_ choice anymore.

          Joe

    • StevenDrost

      Great point. I’m not about to watch a TV show on my phone when I have a tablet or set top box. The same way I’m not about to make a spreadsheet on my tablet or phone. But, mobile devices are improving much more rapidly than the traditional PC. As processing power and software improve in mobile devices, there is no reason to think I won’t be docking my phone into a keyboard, mouse and screen if I need to make a spreadsheet. Or perhaps my watch holds the CPU and everything else is just an accessory or dumb piece of glass.

      In the future, the form factor will be taken out of the debate and it will be a pure OS war of Windows vs Android vs IOS. For many computing needs windows is currently the only game in town, but that is rapidly changing. Make no mistake, the PC is in a state of decline. But that decline will take a long time to play out.

    • jfutral

      “Smartphone for mobility, Tablet for media consumption, … Set top Box or smart TV for your living room,”

      Just to dissect and diverge a bit, I think TV and media consumption in general is still being hashed out. There is certainly a western mentality to TV that is not shared in at least Japan and Korea, where a great deal of TV consumption happens on their smartphones. I am also meeting more and more 20 somethings who are foregoing a TV (as well as a car, both of which I think speak to huge future trends, but that’s too far off topic) and watching what TV they do watch on their laptops, iPads, and smartphones. Live sports (as evidenced by the recent World Cup) is really missing out on a huge opportunity by sticking to cable/set top TV. Even my wife, when I am not home, watches most of her TV on her laptop. Those of us who think TV for TV are a dying bread.

      Joe

  • Mark

    Part of this debate goes back to Steve Jobs analogy about trucks and cars and computers. He never said pcs would disappear.

    As I reflect upon your article I am of an age where computers were mainframes using punch cards. Then came mini computers which did not replace mainframes so much as expanded the roles and usage of computing. Then came personal computers which again in the end expanded the range and usage of computing. Now we are in the period of phone and tablet computers. Potentially billions of people will have access and use computers.

    So the whole argument for saying that one form of computing will be replaced by another is specious in the light of evidence. Is the market for any type of computer expanding staying the same or diminishing I would think happens on the margins for the older versions. I suspect the role for mainframes got clarified in part because of the introduction of mini computers, and so on.

    I enjoyed your article, thank you.

    Mark

    • Bob O’Donnell

      Thanks very much…

  • Defendor

    I agree.

    Too many were eager for an early twirl on the PC’s grave.

    I also see the big smartphone and convertible PC shrinking the use case of the tablet (to zero for some).

    Still don’t like the Chromebook though, and think it is a niche product.

    • Bob O’Donnell

      Completely agree. The tablet usage decline is a reality and suggests some challenges for that form factor. I also think Chromebooks are more of a niche, but again, they’re adding a new twist on an old market and that makes them interesting.

      • Defendor

        Chromebook has one thing going for it. It’s a proper clam-shell notebook form factor. It’s the OS that leave me cold.

        As far as form factor goes, the clam-shell is here for the foreseeable future, and IMO the best convertible PCs are still clam-shells like the Lenova Yoga family.

        A Yoga and a big phone, and you are good to go.

  • JoeS54

    The mistake has been made by the media because they’ve only looked at sales numbers and shipments, without applying some common sense. The market for tablets was relatively new. Everybody already had a PC. So when deciding where to spend their disposable income, people who were potential tablet buyers chose to buy tablets, and put off buying a new PC. As more and more of the “addressable audience” for tablets already owns one, the playing field evens out. Some of us saw this coming. The media apparently did not.

    I also believe Windows 8 has been underestimated, because change of that nature takes time to ripple through the market. It has spurred new hardware designs, and we’re seeing the lessons of mobile devices now being absorbed into PCs. I know a few (very non-tech-savvy) people who have been enticed by a Windows 8 device because of its incorporation of touch and lightweight design.

    • Bob O’Donnell

      Thanks Joe, I think you’re dead on. And, just for the record, I am one of the regular writers on this site and have been making these points for a while. In fact, I wrote a column at the very beginning of the year entitled “The Post Tablet Era,” which I think would probably fit in well with what you’re describing.

  • FalKirk

    I respectfully disagree with the premise of this article. I think that PCs are going to diminish although they will not go away.

    Tablets have taken up the middle ground in computing between phones and PCs. Those who need PCs will opt for the higher end devices since they require either multiple screens or greater processing power or additional ports. This is why Mac sales rose some 18% in a quarter when the overall PC market declined by 2%.

    • Bob O’Donnell

      Oh, come on John…face it, it’s not PCs that are going away…it’s tablets! ;>
      (Feel free to rage on….;>)

      • Space Gorilla

        That’s an interesting comment. If I’m reading Asymco correctly the recent improvement in the PC market is actually still a decline when you separate out the growth of the Mac (as John notes). And it looks like iPad sales in fiscal 2014 will be very close to level with fiscal 2013 (possibly a bit higher, possibly a bit lower as in two percent-ish), but I suspect more growth is coming. Even so, the current level of iPad sales makes the iPad as a standalone business the top PC seller in the world, beating Lenovo by a significant margin. I think Lenovo’s last annual PC numbers were 55 million which they called outstanding. The iPad now sells 70 million per year. Surely you have to admit that’s impressive.

        I would guess we’re in a kind of ‘pause’ when it comes to iPad sales, as the capabilities of the device expand to take over more traditional PC jobs-to-be-done. One of Apple’s ‘problems’ is they made a great quality device. I have an iPad 2 and I simply will not need a new iPad for another year, maybe two. Although a larger screen iPad with 256 GB storage might spur an upgrade for me, certainly. Hmm, I wonder if it is the iPad Mini that will suffer when/if larger screen iPhones hit the market? Perhaps not. I tend to think we choose the device based on screen size, so it’s good to have a range of sizes. What does Apple care which screen they sell? They’re all plugged into the ecosystem.

        • Bob O’Donnell

          To be clear, the smiley faces should have implied it was a joke. I don’t think tablets are going away, however, I do think tablets are facing serious challenges and I have some serious doubts about seeing iPad sales ramp back up again. As you point out, most people are happy with what they have and so don’t feel a compelling need to upgrade. Also, based on survey data I just did, tablet usage among the mainstream is much lower than PC or smartphone usage and with the growth of large smartphones, those tablet usage numbers could likely go lower.

          • Space Gorilla

            Yeah I got the joke. But still, I don’t think the phrases ‘serious challenges’ and ‘serious doubts’ apply to the iPad, which has been the top selling PC for a couple years now. I would agree that when you throw Android tablets into the mix, that changes things, but the iPad is a different beast. Drawing conclusions based on all tablet data doesn’t seem wise.

            We need context when we talk about iPad sales being ‘down’. If Lenovo can characterize 55 million PCs sold annually as outstanding, what should we say about 70 million iPads sold annually? It seems the answer is that many analysts are saying things like ‘serious challenges’ and ‘serious doubts’. That doesn’t make sense to me.

            It’s interesting, I’ve made this comment about the iPad and Lenovo a number of times, and I never get a response. I wonder if that’s because when you put it in that context it makes the ‘iPad sales in trouble’ narrative seem rather silly.

          • Bob O’Donnell

            I guess it all depends on how you define “trouble”. My point is, I wouldn’t be surprised to see continued y/y quarterly declines in iPad shipments…that’s a pretty straightforward metric.

          • Space Gorilla

            Yes, it does depend how you define trouble. I would think beating the current top PC seller by a significant margin doesn’t qualify as ‘trouble’. I’ll note that you sidestepped that bit of context.

            Right now it looks very much like fiscal 2013 and fiscal 2014 iPad sales will be close to even. I’m not a fan of using quarterly data, it feels too granular to me, especially if you’re using ‘off quarters’. Apple needs to sell 16 million iPads in the back to school quarter to be even. If they sell 14 million that will be roughly a 2-3 percent decline annually.

            If sales of the iPad level off from here on out I guess I’ll ask someone at Lenovo to characterize those sales, I suppose they’d have to say ‘better than outstanding’, which of course will be interpreted as ‘in trouble’.

          • Bob O’Donnell

            I didn’t really mean to sidestep the Lenovo comparison and yes, iPads continue to offer impressive sales overall. However, the general assumption has been that those sales would continue growing and my argument is that I don’t believe they will and, instead, will actually decline. As for metrics, y/y quarterly comparisons are about as standard as you can get because they avoid seasonal shifts by quarter.

          • Space Gorilla

            I’m not sure who assumed the iPad’s initial growth would continue at the same rate, it was remarkable, beating the iPhone to every sales milestone. I expected the rate of sales to slow down. I did the math once, just roughly, projecting iPad sales that kept up that initial pace, and it was ridiculous, something like one billion iPads sold annually by 2017. So it was obvious that the growth had to slow way down. I can’t be the only person who figured this out.

            We’re also a long way from an actual decline. If fiscal 2015 sales decrease significantly from 70 million, then we’ll talk. But I think a ‘levelling off’ or a ‘pause’ is much more likely. And at 70 million per year, that is already friggin’ incredible.

            Quarterly comparisons can miss many nuances, and also larger issues such as supply, inventory, and shifts in buying or release cycles. A complete year gives you a better picture. Here’s a simple example, the quarterly YoY comparison was what, 16 percent down and then 9 percent down? So if the annual sales end up being only 2 or 3 percent down (2013 to 2014), was that quarterly data helpful? What if sales are dead even? How well did that quarterly data actually inform you? Not well at all, it actually misled you.

      • FalKirk

        Just to be clear, Bob and I disagree but we disagree respectfully. Differences of opinions make for good writing. :-)

  • Bruce_Mc

    I think Windows XP should be mentioned in this discussion. People replacing their XP machines could be causing an uptick in PC sales. That is not going to sustain the PC over the long term.

    • Bob O’Donnell

      Definitely true and, though I didn’t specifically call out WinXP in the piece, I did make the point that these recent gains could be short-lived. But, I still think we’re seeing some important vibrancy in the market and that’s essentially the point I was trying to make.

      • Bruce_Mc

        You definitely make some good points. I guess I am in the tablet camp, but I’m more curious about what will happen than certain. Robust PC sales during the upcoming holiday period could change a lot of people’s minds.

        • Bob O’Donnell

          Yes, it will be interesting to watch…

    • Space Gorilla

      I’ve noted this previously, unless I’m reading Asymco incorrectly, there was no recent uptick in PC sales. When you separate out the substantial growth of the Mac, PC sales are still in decline.

  • Samir Shah

    However hard we may wish, new UI will make older UI irrelevant. We are in a progression, Command Line -> Mouse -> Touch -> Speech. PCs that have Touch and Speech will survive . Others will live what may be called “prolonged death”.

    • JoeS54

      I disagree. For many tasks that must be done on a PC, a mouse is still the best and only option. Touch is crude. A fat finger jabbing at a screen cannot replicate the pixel-level accuracy of a mouse cursor. Touch and speech will increasingly be integrated, but neither of those input methods can replace a mouse. Maybe there will one day be something that can, but those are not it.

      One of the most obvious examples is the simple act of selecting text to be copied and pasted. One of the most fundamental tasks that people do on a computer, and doing it with anything other than a mouse is excruciating.

      • Space Gorilla

        Interesting example with copy/pasting text. I prefer editing on my iPad, once you get used to it selecting/copying/pasting is really slick and fast. Maybe it is excruciating *for you*, but it works great for me.

        You are correct about pixel level accuracy though, but I can imagine a number of solutions to that problem, and indeed there are apps that already solve that problem and allow easy manipulation at the pixel level.

      • aardman

        For me and my iMac, touchpad beats the mouse hands down. Same precision but with greater economy in motion. Especially with tap to click enabled.

        • JoeS54

          Touchpad, trackball, mouse, whatever – they’re all essentially the same form of input. You’re using an external, hand operated device to move a cursor on the screen, as opposed to touching the screen directly.

        • Space Gorilla

          I wonder, at some point when we’ve got larger screen iPads, I could see Apple enabling an option to add a touchpad as an accessory and have some kind of pointer mode for apps. One of the strengths of the iPad is the modular nature of it, the way you can plug different accessories into it to expand the capabilities of the device, since the iPad is essentially just a screen. Of course every new feature needs power and there’s always that trade off.