Greg's Bite: The Decline and Fall of the PC
TweetFollow Us on Twitter

Greg's Bite: The Decline and Fall of the PC

By Greg Mills

Industries rise and fall. No matter how large the company, an eye has to be on the market, paying particular attention to revolutionary products. That the PC industry sees the Apple mobile revolution isn't in dispute. The problem is, that try as they might, competing with Apple is very hard to do.

With HP now agreeing with Steve Jobs that the PC is dead and moving on to business applications and services, the world's biggest PC manufacturing machine is now up for sale. Some analysts think the size and value of the HP PC manufacturing arm is too big for any one competitor to buy, so cutting it up is likely. Time is not on the HP side of the situation. The longer the process takes to spin off manufacturing HP PCs, the less the division is going to be worth.

First of all, the sales numbers on HP computers across the board is going to decline. If you are looking at PCs and you see an array of HP computers on display, you would naturally expect them to be sold at a steep discount as they are discontinued goods. The fire sale it took to move the TouchPad may be a foretaste of what happens to HP brand computers. PC sales are already very slow and the margin is only around 7% on HP computers anyway.

It appears Samsung may be sniffing around with the prospect of buying HP's PC manufacturing business intact. If this is true, HP should take the money and run as Samsung is likely to have purchased the industrial version of the Titanic. Rearranging the deck chairs on the Titanic or changing the ships name wouldn't slow down the sinking of the supposedly unsinkable. Leaking boats are doomed to sink and changing owners won't plug the leak that is going to force the decline of the PC industry in general.

The underlying change in the computer industry from the desktop box or laptop PC to a mobile platform, iPad to be specific, is so fundamental nothing can be done to save the existing PC industry. The reason every player in the PC industry is making a best effort stab at matching iPad is that they know the end of the PC industry, as we know it, is in sight.

There may always be a market for a larger computer with a keyboard, screen and input device, but 10% of the existing PC market isn't enough to support the entire existing Windows PC industry. When you consider the likely reduction in volume that is coming, it is no wonder HP wanted out.

I predict that only 1-in-5 PC style computers now in use, is likely to be replaced with a new PC and half of them will be new Macs, I expect 4-out-of-5 existing consumer computers now in use to be replaced by iPads over the next five years. This will happend during the normal product replacement cycle .

My daughter took my iPad to school yesterday as the class is beginning to study the stars. I have the app "Star Walk" on it and her teacher was absolutely amazed as the iPad was rotated around the star map changed to match the orientation of the device. She told the class that she has to get an iPad. When was the last time someone showed you an HP laptop app that generated so much excitement? Yeah, dream on HP.

The lesson ought to be learned early in business school, get out of declining industries as early as possible. The companies that are slow to respond to collapsing industries will take the worst hit. A good example of the way the decline of the PC industry is going to take place is well illustrated by Kodak.

Just as the PC industry was making a lot of money for a couple of decades with no end in sight, Kodak was selling film and film processing with no end in sight. The PC industry got a rude awakening when Apple launched the iPad, just as Kodak first saw the digital camera revolution unfolding.

Kodak has slowly declined despite Kodak brand digital cameras and tons of patents. It take a long time for prosperous companies that have led an industry to completely crumble. At this point the digital imaging patent portfolio of Kodak may be worth more than the company itself. While the brand name "Kodak" is well recognized, when was the last time you bought film or had a roll of film developed? The move of the computer industry to mobile will happen a whole lot faster than the obsolecence of film. Film took 15 years to be phased out, where as the PC will die out in half that time.

The pattern the PC industry is likely to accelerate, the razor think profit margins on PCs we see today will decline further to less than zero, as the market continues to rapidly shrink and PC manufacturers begin to fail and dump PCs on the market. If I had a lot of money to invest I would go long on Apple and short on any of the PC manufacturers. No matter how they squirm, Apple is going to eat them alive. The PC is dead and just doesn't want to accept it yet. Steve Jobs is right again.

That is Greg's BIte.

 
AAPL
$100.89
Apple Inc.
-0.65
MSFT
$45.01
Microsoft Corpora
-0.17
GOOG
$577.86
Google Inc.
-2.34

MacTech Search:
Community Search:

Software Updates via MacUpdate

BBEdit 10.5.12 - Powerful text and HTML...
BBEdit is the leading professional HTML and text editor for the Mac. Specifically crafted in response to the needs of Web authors and software developers, this award-winning product provides a... Read more
Microsoft Office 2011 14.4.4 - Popular p...
Microsoft Office 2011 helps you create professional documents and presentations. And since Office for Mac 2011 is compatible with Office for Windows, you can work on documents with virtually anyone... Read more
TextWrangler 4.5.10 - Free general purpo...
TextWrangler is the powerful general purpose text editor, and Unix and server administrator's tool. Oh, and also, like the best things in life, it's free. TextWrangler is the "little brother" to... Read more
BitTorrent Sync 1.4.72 - Sync files secu...
BitTorrent Sync allows you to sync unlimited files between your own devices, or share a folder with friends and family to automatically sync anything. File transfers are encrypted. Your information... Read more
Cyberduck 4.5.2 - FTP and SFTP browser....
Cyberduck is a robust FTP/FTP-TLS/SFTP browser for the Mac whose lack of visual clutter and cleverly intuitive features make it easy to use. Support for external editors and system technologies such... Read more
Tinderbox 6.0.3 - Store and organize you...
Tinderbox is a personal content management assistant. It stores your notes, ideas, and plans. It can help you organize and understand them. And Tinderbox helps you share ideas through Web journals... Read more
Adobe Photoshop CC 2014 15.1.0 - Profess...
Photoshop CC 2014 is available as part of Adobe Creative Cloud for as little as $19.99/month (or $9.99/month if you're a previous Photoshop customer). Photoshop CS6 is still available for purchase (... Read more
Adobe InDesign CC 2014 10.0.0.70 - Profe...
InDesign CC 2014 is available as part of Adobe Creative Cloud for as little as $19.99/month (or $9.99/month if you're a previous InDesign customer). InDesign CS6 is still available for purchase (... Read more
Adobe InCopy CC 2014 10.0.0.70 - Create...
InCopy CC 2014 is available as part of Adobe Creative Cloud for as little as $19.99/month (or $9.99/month if you're a previous InCopy customer). InCopy CS6 is still available for purchase (without a... Read more
Adobe Illustrator CC 2014 18.0 - Profess...
Illustrator CC 2014 is available as part of Adobe Creative Cloud for as little as $19.99/month (or $9.99/month if you're a previous Illustrator customer). Illustrator CS6 is still available for... Read more

Latest Forum Discussions

See All

8bit Doves (Games)
8bit Doves 1.0 Device: iOS Universal Category: Games Price: $2.99, Version: 1.0 (iTunes) Description: “I dove it” – Pocket Gamer “They told me I could be whatever I want, so I became a flying hobo” – Cactus Wolf “Let’s you crash into... | Read more »
Madden NFL Mobile Review
Madden NFL Mobile Review By Blake Grundman on August 26th, 2014 Our Rating: :: FINALLY GETS IT RIGHTUniversal App - Designed for iPhone and iPad It looks like EA Sports has finally discovered how to tread the line between free-to-... | Read more »
Superhero Workout Review
Superhero Workout Review By Jennifer Allen on August 26th, 2014 Our Rating: :: SUPERCHARGEDUniversal App - Designed for iPhone and iPad Want a workout with a kind of story tied into it? Superhero Workout is what you’re after.   | Read more »
Star Wars: Commander Review
Star Wars: Commander Review By Jennifer Allen on August 26th, 2014 Our Rating: :: CLASH OF THE FORCEUniversal App - Designed for iPhone and iPad It’s a lot like Clash of Clans, but the use of the Star Wars license means you don’t... | Read more »
Ridge Racer Slipstream Update Adds New C...
Ridge Racer Slipstream Update Adds New Cars, Challenges, and Tracks Posted by Ellis Spice on August 26th, 2014 [ permalink ] | Read more »
Infinity Blade III: Kingdom Come, the Fi...
Infinity Blade III: Kingdom Come, the Final Update, Set to Arrive September Posted by Ellis Spice on August 26th, 2014 [ permalink ] | Read more »
Furious Climber Review
Furious Climber Review By Jordan Minor on August 26th, 2014 Our Rating: :: REACH FOR THE STARSUniversal App - Designed for iPhone and iPad Furious Climber’s rough packaging can’t ruin its awesomely awkward gameplay   | Read more »
Don’t Forget the Milk – Let Heap, the Gr...
Don’t Forget the Milk – Let Heap, the Grocery List App, Help You Stay Organized While Shopping Posted by Jessica Fisher on August 26th, 2014 [ permalink ] | Read more »
MZR Review
MZR Review By Rob Thomas on August 26th, 2014 Our Rating: :: MAZED AND CONFUSEDUniversal App - Designed for iPhone and iPad How quickly can you escape from MZR’s neon mazes of doom? Why not find out for yourself?   | Read more »
Take Note – Livescribe Partners with Mol...
Take Note – Livescribe Partners with Moleskine to Make Livescribe Notebooks, Available Now Posted by Jessica Fisher on August 26th, 2014 [ permalink ] Livescribe has announced a partne | Read more »

Price Scanner via MacPrices.net

Life Inventory iOS Apps – Learn to Know Thyse...
James Hollender’s Life Inventory apps s are now on sale with 20% off thru Labor Day, 09/01/2014. This is a great opportunity to get started on that Moral Inventory you’ve been putting off doing for... Read more
Pocket Watch, LLC. Reveals Cloud Server For P...
Beaumont, Texas based Pocket Watch, LLC. has announced the availability of its new ActivePrint Cloud Server Powered by Raspberry Pi. With this small standalone box almost any USB printer or available... Read more
902it Simplifies Area Code Changes For Nova S...
The east coast Canadian provinces of Nova Scotia and Prince Edward Island are phasing in 10 digit telephone dialing, to be fully in place by November, in order to accommodate a second area code to... Read more
Boomerang iPad Stand Mounts Your iPad Anywher...
Boomerang, a Mountable Stand with Multiple Viewing Angles, is now available for iPad Air. Boomerang combines several functions that aim to expand your iPad’s potential in one, elegant product. The... Read more
Retina MacBook Pros available starting at $10...
The Apple Store has Apple Certified Refurbished 13″ and 15″ MacBook Pros available starting at $929. Apple’s one-year warranty is standard, and shipping is free: - 13″ 2.5GHz MacBook Pros (4GB RAM/... Read more
Apple 27-inch Thunderbolt Display (refurbishe...
The Apple Store has Apple Certified Refurbished 27″ Thunderbolt Displays available for $799 including free shipping. That’s $200 off the cost of new models. Read more
Apple offers free $25 iTunes gift card with p...
The Apple Store is offering a free $25 iTunes Gift Card with the purchase of a $99 Apple TV for a limited time. Shipping is free. Read more
Apple’s 2014 Back to School promotion: $100 g...
 Apple’s 2014 Back to School promotion includes a free $100 App Store Gift Card with the purchase of any new Mac (Mac mini excluded), or a $50 Gift Card with the purchase of an iPad or iPhone,... Read more
iPhone Camera vs. Top Tier DSLR In Picture Qu...
If you’ve wondered just how good the iPhone 5s’s 8 megapixel rear-facing camera is in terms of image quality, The Verge has posted an excellent feature that should remove any ambiguity on the matter... Read more
Apple Announces Limited iPhone 5 Defective Ba...
Apple says it has determined that a very small percentage of iPhone 5 devices may suddenly experience shorter battery life or need to be charged more frequently. The affected iPhone 5 units were sold... Read more

Jobs Board

Senior Event Manager, *Apple* Retail Market...
…This senior level position is responsible for leading and imagining the Apple Retail Team's global event strategy. Delivering an overarching brand story; in-store, Read more
*Apple* Solutions Consultant (ASC) - Apple (...
**Job Summary** The ASC is an Apple employee who serves as an Apple brand ambassador and influencer in a Reseller's store. The ASC's role is to grow Apple Read more
Project Manager / Business Analyst, WW *Appl...
…a senior project manager / business analyst to work within our Worldwide Apple Fulfillment Operations and the Business Process Re-engineering team. This role will work Read more
Position Opening at *Apple* - Apple (United...
…customers purchase our products, you're the one who helps them get more out of their new Apple technology. Your day in the Apple Store is filled with a range of Read more
Position Opening at *Apple* - Apple (United...
**Job Summary** Being a Business Manager at an Apple Store means you're the catalyst for businesses to discover and leverage the power, ease, and flexibility of Apple Read more
All contents are Copyright 1984-2011 by Xplain Corporation. All rights reserved. Theme designed by Icreon.