The Revenge of Steve Jobs
Steve Jobs’ original vision for Apple was to own the PC market. When he and Steve Wozniak created the original Apple PC, they fully expected to be the company that brought the PC to the masses. However, once IBM came into the PC market the game changed. By 1983 the IBM PC was the defacto standard in personal computers and Apple was pretty much left in its dust.
When Jobs introduced the Mac in 1984, he was convinced that his new Apple PC would be considered easier to use than the IBM PC and as a result leapfrog the IBM PC and become the PC for the masses. But at that time, the masses could not afford the price of the Mac or the IBM PC and the real growth in PCs was driven by the business market, a market which IBM compatibles helped define and continues to be the top selling PC even today. Even more galling to Jobs was the fact that Bill Gates, with the intro of the Windows UI, basically took Jobs’ implementation of a GUI and put it onto all PCs and in essence made GUIs the defacto standard in how a person navigates the PC experience. Up to now, Gates and team reaped most of the financial benefits from the growth of the PC market.
Although Jobs introduced the first commercial version of a PC as well as commercialized a radical new UI, the PC market under the leadership of IBM compatible vendors and with Gates’ software, fundamentally has been at the center of the PC revolution and even to date, IBM PC compatible products dominate the market overall for personal computing and Jobs never realized his goal of Apple owning the PC market.
The PCs Run is Over
Earlier this week, IDC updated their forecasts for Q1 of 2013 and gave some guidance about the future growth of PCs throughout this year. In late 2012, IDC forecasted that the PC market would see a negative growth of 7.7% in Q1 of 2013. But in their updated report on PC sales for the last quarter, PC sales were actually down 13.9%, the worst quarterly decline since they began tracking PC shipments.
All Things D published both the IDC and Gartner numbers for Q1, 2013 and wrote about both companies guidance for PC sales for the rest of the year. Even though the IDC numbers and Gartners numbers are a bit different, they both conclude that demand for PCs is in a real decline and that the likelihood of them recovering is slim.
In this article, Arik Hesseldahl of All Things D states “At this time, it has to be said that much of the blame for the damage being done to the PC businesses of all the companies around the world can be laid at Apple’s feet: Sales of the iPad, the world’s leading tablet brand, have a lot to do with the collapse in PC sales.”
When Jobs introduced the iPad, he clearly stated that this product would drive the post PC era. I think he knew that his tablet was finally the reinvention of the PC he had longed to bring to market and that it would actually cause the decline of PCs, even if it meant eating some of his own children (the Mac). More importantly, by the time he introduced the iPad, he had in place all of the hardware, software, and services needed to connect the iPad to his ecosystem and even with any decline in the Mac business, he was fully insulated from the impact any downturn in Mac sales would have on his business. On the other hand, HP, Dell, Acer and other PC OEMs who were totally PC driven are feeling the shock of the decline in their PC businesses and are not any where insulated like Apple to withstand the impact of these sharp declines in PC demand. Their only hope is that Microsoft can deliver key software and services that they can use on tablets and convertibles of their own. But it may be too late for them given the strong position in tablets Apple already has and from strong competitors like Samsung, Amazon, and others who are in many ways better insulated through their own ecosystem of products and services already up and running.
While Steve Jobs is no longer with us, I think he knew that this would happen. Perhaps his last major act was to give us the iPad and finally have revenge for the years of toil in the PC market where he always ended up #2, even though he was first with many of the innovations that actually drove PCs to the masses. If he were with us today I suspect he would not shed any tears to see the decline of the PC market and instead revel in the role the iPad played in bringing his PC competitors to their knees.