Source - http://www.nytimes.com/
By - NICK WINGFIELD
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The death of the personal computer may be an exaggeration. But the
industry around personal computers seems to be in limbo.
Like the mainframe, which was said to be dead decades ago but has
remained a meaningful business, the PC will almost certainly cheat
death. True, mobile devices like the iPad will continue to gore PC
sales. Those mobile devices, though, will most likely never satisfy
spreadsheet masters, film editors and other workers who depend on
multiple screens and the precision of a keyboard and mouse.
Still, there is a strong view among many longtime tech executives that the PC’s relevance will steadily diminish.
“In my humble opinion, the PC as we have known it is in a continuous
decline and being relegated to a utility device for businesses,” said
Hector Ruiz, the former chief executive of Advanced Micro Devices, a
company that makes chips for PCs and other devices.
The mood around the PC industry has become increasingly glum. The
business is effectively in a recession, and there is no upturn in sight.
During the second quarter of the year, global PC shipments fell around
11 percent, for their fifth consecutive quarter of declines, the worst
downturn since the advent of the PC more than 30 years ago.
Intel, supplier of the chips in most PCs, and Microsoft, which makes the
Windows operating system on the vast majority of those machines, have
delivered disappointing financial results. An overhaul of Microsoft’s
software, Windows 8, did not lift sales and may have made them worse.
The once-mighty Dell, deeply weakened by the PC slump, is mired in a
struggle with shareholders over a plan to go private, seeking relief
from investor pressure. In their bid to take the company private,
Michael S. Dell, the founder, and the investment firm Silver Lake have
argued that they would turn the company into a corporate software
services provider. A vote on Dell’s future is expected this week.
While sales of PCs to businesses remain steady, demand among consumers
has plunged, largely because people are instead buying iPads, Kindle
Fires and other tablets.
Still, a reality check: more than 300 million PCs are expected to be
shipped this year globally. That is a lot of widgets for a business that
has caught a cold.
Tablet sales are growing explosively. This year, there are expected to
be more than 200 million shipments of the devices, which will for the
first time exceed shipments of notebooks, the largest category of PCs,
estimates Gartner, the research firm.
Steven P. Jobs, the Apple chief executive who died in 2011, predicted
several years ago that PCs would become something like trucks,
workhorses used by many people but outnumbered by tablets, the cars of
the technology business. (The analogy is somewhat undercut by stats: the
most popular vehicle in the United States for several years has been a
truck, the Ford F-150.)
One theory is that tablets are leading PC shoppers to postpone purchases
of new computers, perhaps by a year or two, but that eventually people
will be ready for a fresh machine. “Replacement cycles are being pushed
out,” said Toni Sacconaghi, an analyst at Bernstein Research.
A more pessimistic view is that a lot of the consumer demand for PCs
will never return. Daniel Huttenlocher, the dean and vice provost of
Cornell University’s new New York City technology campus, said consumers
began buying PCs in big numbers beginning in the 1990s largely because
no better device existed for getting on the Internet.
But the PC, he said, was always better suited as an office machine for
the production of documents, presentations and other work. In his view,
tablets are better for the consumption of content, whether that is
watching Netflix or surfing the Web.
“There are way more consumers than producers, period, even in a world
with lots of user-generated content,” Dr. Huttenlocher said.
In the first quarter, 53 percent of computer shipments were to the
consumer market while 47 percent were to the commercial market,
estimates the research firm IDC.
Many consumers will still favor PCs for tasks like editing home movies
and writing term papers. But tablets are already invading the turf of
PCs in many professional niches, from flight manuals for airline pilots
to cash registers in restaurants.
The incumbents in the PC industry — especially Microsoft and Intel, the
software-chip duopoly with the most to lose from the decline of the
business — have a seemingly straightforward response: redefine the PC to
make it more tabletlike. Microsoft designed Windows 8 to work well on
touch-screen devices. If users tire of finger gestures, they can switch
to a classic Windows desktop interface that they can operate with a
mouse and keyboard.
Intel, meanwhile, has refined its chips so that they are more thrifty
with their consumption of battery power, an important requirement for
mobile devices.
The changes have given rise to a frenzy of crossbreeding in devices,
effectively blurring the boundaries between PCs and tablets. Now
notebooks can turn into tablets either by flipping their screens or
through fully detachable displays. Many otherwise ordinary notebooks
come with touch displays for quickly jumping between different modes of
operation.
Microsoft and Intel are betting that devices coming out in the fall will
finally get PC shoppers back in stores. Microsoft plans to release a
new version of its operating system, Windows 8.1, that responds to
complaints its customers had with the earlier version.
“What you’re going to see over the next few months is a lot more designs
from every PC manufacturer,” said Adam King, a director of product
marketing at Intel.
Using the automotive analogy of Mr. Jobs to different effect, Frank
Shaw, a spokesman for Microsoft, said the car business kept subdividing
into many categories, including luxury models and electric vehicles.
“You can say the same thing is happening in computing,” Mr. Shaw said.
Anand Chandrasekher, the chief marketing officer of Qualcomm, which
supplies chips for some mobile Windows devices, says he expects
Microsoft will successfully adapt to the changes in its business. “I
admire Microsoft for the changes they’ve made,” Mr. Chandrasekher said.
“We’re bullish that they will have a strong presence in the
marketplace.”
Some people are deeply skeptical that creating a new hybrid class of
devices will help stop the momentum of tablets from Apple and companies
with devices based on Google’s Android operating system. Marc Benioff,
the chief executive of Salesforce.com and a frequent Microsoft
antagonist, said customers had already shunned new types of devices,
like Microsoft’s Surface.
“The reason why they’re not accelerating growth is for one simple
reason,” Mr. Benioff said. “There’s a better technology.”
Whatever happens to the PC business, the iron grip that companies like
Microsoft and Intel once wielded over hardware makers appears to be no
more. Hewlett-Packard now makes a notebook using Google’s Chrome OS
software and a tablet based on Android, Google’s mobile operating
system. Lenovo, the world’s top seller of PCs, is big seller of Android
smartphones and tablets, especially in China.
In an earlier era of computing, those would have been considered intolerable acts of disloyalty.
“We’re a device company,” said Gerry Smith, a Lenovo senior vice
president and head of its Americas division. “We’re agnostic on hardware
and agnostic on software, whether Android or Windows.”
Meanwhile, Microsoft has struggled to maintain its influence with
software developers, which have gravitated in ever greater numbers to
Apple and Google’s mobile technologies.
Aaron Levie, the chief executive of Box, an online storage company that
has developed software for Windows 8, said that influence was once
Microsoft’s most powerful asset.
“It wasn’t the absolute value of the technology,” Mr. Levie said. “It’s
that you have mindshare and ecosystem support. Microsoft is now in a
very different world these days.”
