As PC Market Fragments, Winners and Losers

The PC market is seeing a profound split or forking in the road on how Computing is served to the public. It is creative versus utility usage. The result should see in the next  2-3 years a profound drop of 30-70% in classic PC sales [think desktop, laptops and most clamshell notebooks]. PCs will be replaced by smartphones, tablets, remotes and DOC-Display Oriented Computers.  For smartphones think Apple iPhones, the Android bunch, Blackberry uber secure devices, etc. For tablets think Apple iPad, the Android Tablets, and host of Amazon Kindle like devices.Yes, the  same-old, same-old PC market is fragmenting bigtime.

The Creative vs Utility Split

But what is the creative versus utility split? Creative PCs  are work computers used to create new content for the Web, IT systems, and engineering /technical development. They are also operational computers used to manage trading desks, manufacturing operations,  administration functions. These creative/operational machines have at least 1 of 3 key characteristics:
1)Huge screen size requirements including two or more screens – primarily in operational settings but also in creative development of new programs or web or mobile apps. These are solid classic and static  PC markets.
2)Big CPU requirements for analysis and/or development tasks – think engineering design and modeling, database development, graphics design and image/video processing, compiling and software design/development, statistical analysis and economic modeling plus other CPU and Net intensive systems. Underlying all of these systems are local requirements for large computing power and huge, fast disk drives to feed the beasts. Solid classic PC again.
3)Peripheral drivers and communication centers – again these are largely operational computers that are connected to the local area network, the Web, and often a host of peripheral and/or specialized output devices. They are PCs often rooted to the spot and bought for their ability to connect to anything and be  customized for any situation at a moments notice.

The key to creative/operational PCs is they need all the display space and/or computing power, memory, and local disk space that can be provided. They need the fastest possible connections and often to everything and its neighbor. Thus these PCs are not easily ported, often have special security requirements, and suck up power.

Utility or media tablets are the exact opposite of classic PCs. They are light and portable. They have a full day of battery power. They are connected but through the air with Wifi and 3G/4G. They have no keyboards or mice. They are easy to use with multi-touchscreen taps and gestures. This latter feature is crucial because multi-touchscreen operations have been slow to come to the classic PC. This means smartphones and tablets have a big lead in ease of operations and learning/remembering how to use these “smart” devices.

In addition smartphones and tablets are made for mobility and use on the go. Accelerometers, GPS, often multiple still and video cameras make these devices location aware, position and movement capable, plus superb scene recorders including audio and video tapes of events live.  As well they are communication devices. Everybody can have their own video phone. Or leave the office or home and still be connected – or not. Finally media tablets and smartphones  have apps! Over 200,000 for Apple, 100,000 for Androids, etc. Utility devices have singularly rescued the small software development community that had withered and nearly died on the PC and Mac except for a few major players.

Utility devices have given up wired connections,  big screens , big disks, whomping CPU power [and whomping power requirements] for the sake of portability, ease of use and great utility for the average customer. Users can get connected, carry and display all sorts of media and games, plus do it anywhere and anytime for at least 8 hours of their waking day. For many users this means who needs a PC just like for mobile users who needs a landline, home phone. This is classic   Schumpeter creative destruction.

What Are Remotes and DOCs?

Remotes are the Logitech Google TV device or the Nokia cellphones that can do cash transactions or the rush of touch screen devices that will be be able to remotely control appliances and home control centers . Appliance vendors, homebuilders, suppliers don’t want to get into the game of writing GUI interfaces for the computers that are coming on board cars, fridges, stoves, home power and security control boards, etc. Use an app and WiFi  powered iPhone or Android tablet for these tasks. Outsource the onerous app development and maintenance to the new software shops popping up all over the place.

DOCS are Display Only Computers – think smartphone but bigger screen tablets and slates with substantial docking station connections. DOCs are the link back to classic PCs. With docking stations and fast connectors an Android tablet or an Apple iPad can have not just a keyboard connection, but a second bigger LED monitor, some huge disk space and a fast connection to printers and other peripherals. Great for work or at home for connected usage. Then when the user wants to, they pop a button and the device returns to its portable, all day power supply state. Great for meetings and taking the machine to work. Probably 60-70% of current work PCs could become  DOCs.  Ditto for home PCs. Get the connection? Watch for a complete change-over in offices.

In sum the emergence of smartphones and tablets will change how computing is delivered and utilized profoundly.

Winners++  and Losers- –

Apple++ –  creating a new market gives a big lead to Apple; but strangely Mac users are still losers.
Linux++ Android, Chrome are Linux based. Finally,  trim, reliable  and secure OS gets rewarded.
Google++
– second only to Apple in innovation. Fruition of anywhere Web-connected vision.
Chinese and South Korean smartphone/tablet suppliers++ – finally get a position in home tech computing.
Telecoms++ – lose most of their landlines but gain huge wifi/networking opportunity.
Dell+- – making an entry with ARM+Android, will the new Dell tablets be innovative enough?
HP+- – ditto like Dell. WebOS is a huge gamble. Can HP make it outstanding given its top  management turmoil?
IBM+- –  absolutely no skin in the game; so consulting preeminence without direct influence?
RIM+ – the Street shows no respect for a company that leads by solid innovation.
Microsoft– Windows Phone 7 better be outstanding; otherwise its a significant game over for Redmond.
US– last hurrah as US business, financial, and political elites are  FUBARing in delivering  domestic or global competence?

The biggest winner on the software side Open Source software. Google’s Android has won big time because  vendors can take any part of the Android  code and customize it to their specific device needs. And HTC, Motorola, Samsung, Sprint and others have done so. This has spurred a wave of rapid new and innovative Android hardware and software entries into the market of both smartphones and tablets.

But with the proliferation of platforms such as iOS4, Android, WebOS, BlackberryOS added to Linux, Mac and Windows, developers are looking for cross platform tools like Java, Flash, Appcelerator, Unity, QT and others to reduce the complexity and sheer effort of porting their software to so many OS platforms. Hence the first of several about faces by Apple on what programs can be used to develop  for iPhone, iPad, iPod and AppleTV .

Perhaps the most emphasis for integrated and standards based development has been on HTML5. There is definite promise in the case of HTML5 because browser vendors [Apple Safari, Google Chrome, Mozilla Firefox, Opera’s Opera but not the new IE9] have reached nearly 100% compliance  with the older HTML4, CSS 2.x, DOM 1.x and JavaScript 1.5 or earlier standards. But adherence to the HTML5 standard has been decidely mixed. For example the new IE9 falls short by  half of the compliance with HTML5 that the other 4 major browser vendors are delivering on HTML5. But even the best, Google Chrome rates only 217/300 on meeting HTML5  standards test. See here for an overview of the patchwork quilt that is HTML5. And the standard itself is incomplete with almost nothing done in the important areas of multi-touchscreen+ gestures, Web database, and SVG integration with Canvas graphics.

The biggest question is whether the user community, particularly  large corporates and government shops, will stand again on the sidelines and do nothing about deliberate stalling and sabotaging of standards. Unfortunately, these large users did so  in the case of Microsoft’s stalling on Web standards for more than 10 years  and Redmonds deliberate Java sabotage. Developers have had to suffer the consequences of extra workloads [any surprise why timely innovation and change to systems is hard to deliver in many organizational settings]. Likewise all the major database vendors fell  short or went  proprietary on ANSI SQL such that great database silos of poorly integrated information now plagues the industry with huge and costly “integration tools and procedures” now required to talk between systems effectively.

In sum, PC fragmentation has a software downside that often gets blithely ignored by the crave-crazy Gadget Press of Engadgets, Gizmodos, and TechCrunchers.  PC fragmentation may deliver great innovation and utility to end users; but it also has a potentially large software downside depending on iffy adherence to standards. Is this the inevitable price to pay for Creative Destruction?

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