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Wither the PC?

October 10, 2013

I get to start with the disclaimer that I work for a company that’s heavily involved/dependent on the PC, and I also have broad knowledge of the market history.  All of these opinions are my own, and do not reflect my company, or probably the significant players in my industry.

The death of the PC is greatly exaggerated, but it sure does look like the market is going on a weight-loss program. Would you like the industry analyst quote as he tries to sell his company’s report?

Worldwide PC shipments totaled 80.3 million units in the third quarter of 2013, an 8.6 percent decline from the same period last year, according to preliminary results by Gartner, Inc. This marks the sixth consecutive quarter of declining worldwide shipments.

“The third quarter is often referred to as the ‘back-to-school’ quarter for PC sales, and sales this quarter dropped to their lowest volume since 2008,” said Mikako Kitagawa, principal analyst at Gartner. “Consumers’ shift from PCs to tablets for daily content consumption continued to decrease the installed base of PCs both in mature as well as in emerging markets. A greater availability of inexpensive Android tablets attracted first-time consumers in emerging markets, and as supplementary devices in mature markets.”

When we first started selling the PC in volume to consumers around the world, the appeal was partially the ability access the Internet, which was the best source for information (even if it was often wrong back then).  The mostly visceral appeal that a device could make people — especially kids — in the home smarter was an essential draw to opening up the home as a market for the PC.  From there, things just exploded as PC prices dropped allowing more access across the globe.  I remember selling people coming into the organization on the fact that we were attempting to make the Internet another utility… available everywhere and easily accessible for what the consumer needed.

Well, today, that vision is reality.  It’s just that the other part of that vision was the extreme mobility that a phone would provide for Internet access… and many of the companies so involved in the PC business forgot that part, and assumed that they could continue to drive the PC as the center of Internet access.  So it’s not that the market for the Internet stopped; it just shifted.

We did, though, have another view of the PC, which was as a creation device.  The vision was to enable everyone to be a creator of content.  Images, video, music… everything was available to everybody.  In the business sense, the PC was the idea creation device.  While this still holds, the market does provide a basic capture function on the more mobile devices like phones and tablets that most people mistake for creativity.  For the record, I do NOT consider Instagram content creation.

But creativity is tricky, and the other thing the PC forgot was that real content providers (read: Hollywood) viewed the PC as a threat, not as an opportunity. So content never really emerged, and the false creativity of a quick tweet (along with the general trend to reality-based consumption on TV and the Internet) really took the legs out of the market.

I have to say, what I still don’t get is why the business volumes have not stabilized, and I think there’s a broader economic indicator under there that we’re not getting.  Business people are carrying multiple devices for various functions, so it’s not that the PC is not part of the story.  It’s still the idea creator.  I’ll have more on that later.

But for now, the PC market appears to be a victim of its own change.  Having created the Internet as a category, it failed to meet the promise of the Internet as a utility, and now the players in the game have to find a way back.

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