What the PC Industry of Tomorrow Looks Like

The companies I am not worried about -- the ones who will be in the PC industry of the future -- are the ones that understand mobility and consumer markets. Right now this is a very short list

  • Share
  • Read Later
Adam Hunger / Reuters

We are, without question, an industry in transition. The 500-lb. gorillas who once dominated the technology industry are undergoing major transitions and experiencing new types of growing pains. And for many, this is extremely painful. These titans will rise or fall based solely on their ability to manage this transition and these new types of growing pains. So what’s growing, exactly? Opportunity.

From Business to Consumer

For the past 30 years, the computing industry only appealed to a small group of people – namely the business community. Many companies such as Microsoft, IBM, Dell, HP, Intel, RIM and others got their start by creating products and solving problems for business users.

What many of these companies are learning is that business users are as different from ordinary consumers as night and day. I specifically peg Apple’s turnaround to this observation. Apple has and always will be a consumer company, one that struggled until there was a true consumer market. Now Apple finds success where others have not, simply because the company has always had a vision of creating products for ordinary people. Apple had to wait more than two decades for its true market to emerge. Now, emerge it has and it is billions strong.

A key point signaling this shift was the recent news about the PC’s decline in Q1 sales. Who usually bought PCs in bulk in the first half of the year? It wasn’t consumers. It was businesses. In years past, bulk purchases by enterprise and business buyers helped offset the lack of consumer spending for PCs in this buying cycle. With businesses shifting to BYOD, it’s doubtful the first half of the year will yield the volumes it once did. What we are witnessing in clamshell PC sales is not really massive declines. It is simply the new normal.

The consumer market will dwarf the business-pro market by magnitudes. The PC industry of the past is not the PC industry of the future. The opportunity has shifted from business to consumer, and it is growing faster than many anticipated. Many were not prepared, and the pain of this reality has been life changing for all PC vendors.

From Stationary to Mobile

We were not meant to sit at desks, yet that’s exactly the paradigm that desktops and notebooks brought. Innovations around mobile devices are among the most important innovations for the PC industry of the future. When we first learn to ride a bike, we don’t just sit on it and not move. We take it out and explore the world. While smartphones and tablets deliver on a truly mobile computing vision, we are barely scratching the surface of mobile computing. There is still massive software innovation ahead. We still don’t have devices that truly know anything about us. Anyone who believes innovation is dead is wrong and lacks vision. We still have billions of new customers to bring into the digital age and they want innovative products, many of which haven’t even been invented yet.

At the moment, we are in an adoption-cycle phase, not an innovation phase. Why should we expect revolutionary new smartphones, for example, when half the planet doesn’t even have their first smartphone? Do we expect revolutionary new cars every year or even every few? Until the advancements of hybrid technology, the auto industry had hardly changed in decades. People don’t freak out and scream about the collapse of Toyota because it doesn’t release a revolutionary new car every few years. It’s not a perfect analogy, I admit, but I do believe the consumer market for automobiles brings out applicable insights for the PC industry of the future.

The companies I am not worried about — the ones who will be in the PC industry of the future — are the ones that understand mobility and consumer markets. Right now this is a very short list.

This is the problem for many of the companies that are experiencing growing pains: they have the wrong definition of mobile computing. Couple that with a lack of understanding of consumer markets and it’s bad news for traditional PC vendors unless they really find mobile religion and deliver mobile products that meet the needs of all their current and future customers.

Bajarin is a principal at Creative Strategies Inc., a technology-industry analysis and market-intelligence firm in Silicon Valley. He contributes to the Big Picture opinion column that appears here every week.