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
$116.47
Apple Inc.
+0.16
MSFT
$47.98
Microsoft Corpora
-0.72
GOOG
$537.50
Google Inc.
+2.67

MacTech Search:
Community Search:

Software Updates via MacUpdate

Cobook 3.0.7 - Intelligent address book....
Cobook Contacts is an intuitive, engaging address book. Solve the problem of contact management with Cobook Contacts and its simple interface and powerful syncing and integration possibilities.... Read more
StatsBar 1.9 - Monitor system processes...
StatsBar gives you a comprehensive and detailed analysis of the following areas of your Mac: CPU usage Memory usage Disk usage Network and bandwidth usage Battery power and health (MacBooks only)... Read more
Cyberduck 4.6 - FTP and SFTP browser. (F...
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
Maya 2015 - Professional 3D modeling and...
Maya is an award-winning software and powerful, integrated 3D modeling, animation, visual effects, and rendering solution. Because Maya is based on an open architecture, all your work can be scripted... Read more
Evernote 6.0.1 - Create searchable notes...
Evernote allows you to easily capture information in any environment using whatever device or platform you find most convenient, and makes this information accessible and searchable at anytime, from... Read more
calibre 2.11 - Complete e-library manage...
Calibre is a complete e-book library manager. Organize your collection, convert your books to multiple formats, and sync with all of your devices. Let Calibre be your multi-tasking digital... Read more
Herald 5.0.1 - Notification plugin for M...
Note: Versions 2.1.3 (for OS X 10.7), 3.0.6 (for OS X 10.8), and 4.0.8 (for OS X 10.9) are no longer supported by the developer. Herald is a notification plugin for Mail.app, Apple's Mac OS X email... Read more
Firetask 3.7 - Innovative task managemen...
Firetask uniquely combines the advantages of classical priority-and-due-date-based task management with GTD. Stay focused and on top of your commitments - Firetask's "Today" view shows all relevant... Read more
TechTool Pro 7.0.6 - Hard drive and syst...
TechTool Pro is now 7, and this is the most advanced version of the acclaimed Macintosh troubleshooting utility created in its 20-year history. Micromat has redeveloped TechTool Pro 7 to be fully 64... Read more
PhotoDesk 3.0.1 - Instagram client for p...
PhotoDesk lets you view, like, comment, and download Instagram pictures/videos! (NO Uploads! / Image Posting! Instagram forbids that! AND you *need* an *existing* Instagram account). But you can do... Read more

Latest Forum Discussions

See All

Ubisoft Gives Everyone Two New Ways to E...
Ubisoft Gives Everyone Two New Ways to Earn In-Game Stuff for Far Cry 4 Posted by Jessica Fisher on November 21st, 2014 [ permalink ] | Read more »
Golfinity – Tips, Tricks, Strategies, an...
Dig this: Would you like to know what we thought of being an infinite golfer? Check out our Golfinity review! Golfinity offers unlimited ways to test your skills at golf. Here are a few ways to make sure your score doesn’t get too high and your... | Read more »
Dark Hearts, The Sequel to Haunting Meli...
Dark Hearts, The Sequel to Haunting Melissa, is Available Now Posted by Jessica Fisher on November 21st, 2014 [ permalink ] Universal App - Designed for iPhone and iPad | Read more »
Meowza! Toyze Brings Talking Tom to Life...
Meowza! | Read more »
Square Enix Announces New Tactical RPG f...
Square Enix Announces New Tactical RPG for Mobile, Heavenstrike Rivals. Posted by Jessica Fisher on November 21st, 2014 [ permalink ] With their epic stories and gorgeous graphics, | Read more »
Quest for Revenge (Games)
Quest for Revenge 1.0.0 Device: iOS Universal Category: Games Price: $4.99, Version: 1.0.0 (iTunes) Description: The great Kingdom of the west has fallen. The gods ignore the prayers of the desperate. A dark warlord has extinguished... | Read more »
Threadz is a New Writing Adventure for Y...
Threadz is a New Writing Adventure for You and Your Friends Posted by Jessica Fisher on November 21st, 2014 [ permalink ] In the tradition of round-robin storytelling, | Read more »
SteelSeries Stratus XL Hardware Review
Made by: SteelSeries Price: $59.99 Hardware/iOS Integration Rating: 4 out of 5 stars Usability Rating: 4.5 out of 5 stars Reuse Value Rating: 4.25 out of 5 stars Build Quality Rating: 4.5 out of 5 stars Overall Rating: 4.31 out of 5 stars | Read more »
ACDSee (Photography)
ACDSee 1.0.0 Device: iOS iPhone Category: Photography Price: $1.99, Version: 1.0.0 (iTunes) Description: Capture, perfect, and share your photos with ACDSee. The ACDSee iPhone app combines an innovative camera, a powerful photo... | Read more »
ProTube for YouTube (Entertainment)
ProTube for YouTube 2.0.2 Device: iOS Universal Category: Entertainment Price: $1.99, Version: 2.0.2 (iTunes) Description: ProTube is the ultimate, fully featured YouTube app. With it's highly polished design, ProTube offers ad-free... | Read more »

Price Scanner via MacPrices.net

Save up to $400 with Apple refurbished 2014 1...
The Apple Store has restocked Apple Certified Refurbished 2014 15″ Retina MacBook Pros for up to $400 off the cost of new models. An Apple one-year warranty is included with each model, and shipping... Read more
New 13-inch 1.4GHz MacBook Air on sale for $8...
 Adorama has the 2014 13″ 1.4GHz/128GB MacBook Air on sale for $899.99 including free shipping plus NY & NJ tax only. Their price is $100 off MSRP. B&H Photo has the 13″ 1.4GHz/128GB MacBook... Read more
Apple Expected to Reverse Nine-Month Tablet S...
Apple and Samsung combined accounted for 62 percent of the nearly 36 million branded tablets shipped in 3Q 2014, according to early vendor shipment share estimates from market intelligence firm ABI... Read more
Stratos: 30 Percent of US Smartphone Owners t...
Stratos, Inc., creator of the Bluetooth Connected Card Platform, has announced results from its 2014 Holiday Mobile Payments Survey. The consumer survey found that nearly one out of three (30 percent... Read more
2014 1.4GHz Mac mini on sale for $449, save $...
 B&H Photo has lowered their price on the new 1.4GHz Mac mini to $449.99 including free shipping plus NY tax only. Their price is $50 off MSRP, and it’s the lowest price available for this new... Read more
Check Apple prices on any device with the iTr...
MacPrices is proud to offer readers a free iOS app (iPhones, iPads, & iPod touch) and Android app (Google Play and Amazon App Store) called iTracx, which allows you to glance at today’s lowest... Read more
64GB iPod touch on sale for $249, save $50
Best Buy has the 64GB iPod touch on sale for $249 on their online store for a limited time. Their price is $50 off MSRP. Choose free shipping or free local store pickup (if available). Sale price for... Read more
15″ 2.2GHz Retina MacBook Pro on sale for $17...
 B&H Photo has the 2014 15″ 2.2GHz Retina MacBook Pro on sale for $1799.99 for a limited time. Shipping is free, and B&H charges NY sales tax only. B&H will also include free copies of... Read more
New Logitech AnyAngle Case/Stand Brings Flexi...
Logitec has announced the newest addition to its suite of tablet products — the Logitech AnyAngle. A protective case with an any-angle stand for iPad Air 2 and all iPad mini models, AnyAngle is the... Read more
Notebook PC Shipments Rise Year-Over-Year as...
According to preliminary results from the upcoming DisplaySearch Quarterly Mobile PC Shipment and Forecast Report, the global notebook PC market grew 10 percent year-over-year in Q3’14 to 49.4... Read more

Jobs Board

*Apple* Solutions Consultant (ASC)- Retail S...
**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, *Apple* Financial Services...
**Job Summary** Apple Financial Services (AFS) offers consumers, businesses and educational institutions ways to finance Apple purchases. We work with national and Read more
*Apple* Store Leader Program - College Gradu...
Job Description: Job Summary As an Apple Store Leader Program agent, you can continue your education as you major in the art of leadership at the Apple Store. You'll Read more
*Apple* Retail - Multiple Positions (US) - A...
Sales Specialist - Retail Customer Service and Sales Transform Apple Store visitors into loyal Apple customers. When customers enter the store, you're also the Read more
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
All contents are Copyright 1984-2011 by Xplain Corporation. All rights reserved. Theme designed by Icreon.