A blog post by Frank X. Shaw, Microsoft Corporate Vice President of Corporate Communications filed from last week’s All Things Digital conference notes that the theme of this year’s event was focused on what it means to be in a “Post PC era” – a topic Shaw says he loves.
He noted that looking around the conference, there were iPads and other tablets as far as the eye could see, with most of the people around him using their iPads exactly as they would a laptop – physical keyboard attached, typing away, connected to a network of some kind, creating documents or tweets or blogs or articles. “In that context,” says Mr. Shaw, “it’s hard to distinguish between a tablet and a notebook or laptop. The form factors are different, but let’s be clear, each is a PC.”
Ergo, Mr. Shaw contends that we shouldn’t be getting hung up unnecessarily on semantics and in his estimation the PC is not at death’s door at all but alive and well and thriving — just in an array of different form factors that are different from traditional desktop or laptop PCs, but with the same organizing concept characterizing them: personal in nature, used for work and for play, runs applications, connected to a network, etc. “No matter what label you put on them,” he says, they are personal computing devices.
That’s an eminently sensible analysis. While it’s true that my iPad has enabled me to do some things differently than the way I would with my laptops or a desktop machine, they’re still essentially the same things. For that matter, the laptop enabled a much wider range of personal computing mobility than you have with a desktop PC, so it’s really not a new dynamic. For me, anyway, the tablet has always been a complimentary substitute for a laptop, offering an even wider range of portability and ease of carriage, plus a great deal more spontaneity with virtually instant wake from sleep, albeit at the expense of a considerable degree of power, versatility, flexibility storage capacity, and connectivity.
But it’s still a PC. Mr. Shaw graciously acknowledges the iPad’s dominance of the tablet sector, perhaps not wanting to draw attention to the Microsoft Surface tablet PC’s sluggish sales performance by comparison. Actually, I’ve been surprised that the Surface — especially the Surface Pro — hasn’t done better in the marketplace, further blurring as it does the distinction between tablet and laptop, and in so doing addressing many of the comparative shortcomings exemplified in the iPad as opposed to a traditional PC. The Surface Pro runs a full-featured Windows 8 operating system and consequently a full range of productivity software, supports real multitasking, has decent physical connectivity for peripheral devices, is designed to work efficiently with a physical keyboard (supporting mouse input, which is crucial and with a built-in stand), and matching lower-end SSD equipped laptops like the 11-inch MacBook Air in (nominal) data storage capacity.
On the other hand, I’m not shocked by sluggish market acceptance of the “consumer grade” Surface RT, which uses a watered-down version of Windows 8, supports a comparatively limited range of applications, and runs only a stripped-down tablet version of Microsoft Office rather than the real McCoy for its Pro sibling. Microsoft emphasizes that Office RT is more Office than the iPad supports, but whose fault is that? Redmond has just announced that it is offering a a free Touch Cover, Touch Cover Limited Edition, or Type Cover ($120 – $130 value) with the purchase of Microsoft Surface RT tablet PCs during the month of June, which smacks a bit of desperation — or perhaps even a catalyst to clear out unsold Surface RT inventory prior to discontinuing the model? Surface Pro buyers still have to pay for their keyboard covers.
The Surface Pro has been doing somewhat better than the RT (Microsoft has been cagy about publicizing actual Surface sales metrics), but my inference is that it’s encountered some price resistance, being as it sells in the same price range as many thin and light full laptop PCs like Ultrabooks and MacBook Airs.
Blurred tablet/laptop distinctions notwithstanding, the heavy-hitter market research firms NPD Group/NPD Displaysearch, Gartner Group, and International Data Corporation (IDC) all still persist in segregating PC and tablet device sales metrics. Another market research player, Canalys, was the first (and thus far only) major analyst company to include ‘pads in its PC market results, which has always made sense to me.
A couple of years ago, Forrester Research Senior Analyst Sarah Rotman Epps in a blog post last week entitled: “The Post-PC Era: Its Real, But It Doesn’t Mean What You Think It Does” nicely summed up the Post PC dynamic, emphasizing that the “Post PC Era does not mean that the PC is dead, projecting that even in 2015, when 82 million US consumers are forecast own a tablet, more US consumers will still own laptops (140 million).
Looking back, MS. Rotman Epps noted that the “Post PC Era” phrase wasn’t actually coined by Steve Jobs, but entered the public vernacular in 2004 when IBM sold its PC unit, and former Sun Microsystems CEO Jonathan Schwartz told The New York Times that “We’ve been in the post PC era for four years now,” noting that wireless mobile handset sales had even then already far surpassed PC sales around the world, and further that the post PC concept can be traced back at least as far as 1999 when MIT research scientist and visionary David Clark gave a prescient talk called “The Post PC Internet,” describing a future point at which items like wristwatches and eyeglasses would be Internet-connected computing devices, thereby forecasting with uncanny accuracy Google Glass devices and Apple’s rumored iWatch smartwatch with virtual 20/20 foresight from 14 years out.
For 2013, Canalys has forecast Wintel PC market share to fall to 65 percent, with combined shipments of desktops, netbooks and notebooks having showed a year-on-year decline of around 10% in the fourth quarter of 2012 as consumers flocked towards Android and iOS tablets over Wintel-based PCs. Canalys analysts expect that Microsoft and Intel will suffer further, with Wintel PC market share expected to decline from 72 percent in 2012 to 65 percent in 2013 with a five percent decline in unit shipments, largely attributable to the poor outlook for notebook sales. “Pads and, increasingly, smartphones can perform many of the day-to-day computing tasks that most people require,” commented Canalys Research Analyst Pin-Chen Tang, “Wintel PCs are becoming less likely as an individual’s first choice of computing device for everyday tasks, such as sending email or web browsing.”
Canalys Research Analyst Tom Evans has also noted that the Windows 8 launch last year failed to reinvigorate the conventional PC market, Microsoft’s latest OS being popularly perceived as so different to previous versions that many Windows users are being put off by the prospect of having to learn a new OS. That that a PC with a touch-screen is needed to get the best user experience out of Windows 8 hasn’t helped with attendant higher-cost implications.
Evans’s colleague, Canalys Analyst Tim Coulling, noted in a report earlier this year that “The combination of Windows 8 and Ultrabooks has been the catalyst for notebook form-factor innovation,” but what was becoming a routine purchase is now more complex. “It is clear that Microsoft is now pushing touch as the primary input method for Windows, but keyboard and mouse are still needed for legacy application,” said Coulling. ‘Following the launch of the iPhone, the shift from keypad/keyboard to touch input on smartphones was rapid. The popularity of pads and the inevitable decline in touch-panel prices will cause the same trend to emerge in the PC market.” “Now buyers must decide between an Ultrabook and a standard notebook, a touch-screen and a non-touch-screen, as well as an increasing array of form-factors, such as clamshell, convertible and hybrid. This added complexity will make purchases more considered and lengthen the sales process.”
Canalys has predicted that from 2014 to 2016 the PC industry will experience a shift in form-factor mix, as consumers in both mature and high-growth markets become more interested in new PC designs based on touchscreens. Canalys expects tablet market growth of 37% on average each year between 2012 and 2016, with volumes reaching 389 million units and accounting for 59% of total PC shipments. This growth is expected to be driven by a combination of Apple’s iPad and iPad mini; an array of low-cost, content-subsidized Android products; and Windows-based hybrid PCs (eg, Microsoft’s Surface Pro). Canalys notes that the hybrid form-factor adds value to ‘pads, enabling a greater degree of productivity, which, combined with expected improvements in Android and iOS, will further encourage and accelerate the shift from notebooks to pads.
Getting back to Frank X. Shaw’s contention that the newer mobile device form factors are still PCs, Canalys consumer research agrees that current ‘pad usage resembles that of PC usage, rather than the typical usage profiles with media players or e-book readers. After Web browsing, both pad owners and non-owners surveyed in Western Europe linked ‘pad usage to e-mail/messaging and social networking. Among ‘pad owners, all three categories rated much higher than e-book reading and video watching. Non-owners, however, expected e-mail/messaging, e-book reading, and video watching to top pad usage after web browsing.
It was also noted that iPad owners used a significantly wider range of categories than other brand ‘pad users, probably at least partly attributable to the greater variety and more consistent quality of apps available for the iPad comparatively. Canalys found that the most popular apps among non-iPad owners tended to be relatively functional ones, such as e-mail, social networking, news and banking, and that while iPad owners also used these sorts of apps, they reported a much higher use of general web browsing and video consumption, noting that in reality and practice, ‘pads have a wide range of uses (just like PCs). While browsing, for example, does include finding and consuming content, it also includes many other activities, examples being work-related research, shopping online, online banking, tax filing, and so forth, similar to how most people use PCs “This broad usage pattern reinforces the pads role as a general-purpose computing device, and much more than just a consumption device,” says Canalys’s Tim Coulling. “The ‘pad represents a real threat to PC and consumer electronics vendors, as it is capable of replacing devices in a range of other categories.” Or viewed another way, represents extension and enhancement of the reach of general-purpose computing devices.
Canalys attributes differences between iPad and non-iPad users to screen size, user experience, and app inventory. While the full-sized iPad has a 10″ display, a large proportion of other pads, including Apple’s own iPad mini, have 7-inch – 8-inch screens, and Canalys had observed that there is evidence from video service providers that the proportion of time consumers spend watching video on different devices is directly proportional to screen size.
“Tablets have dramatically changed the device landscape for PCs, not so much by ‘cannibalizing’ PC sales, but by causing PC users to shift consumption to tablets rather than replacing older PCs,” Mikako Kitagawa, principal analyst at Gartner, commented back in March. “Whereas as once we imagined a world in which individual users would have both a PC and a tablet as personal devices, we increasingly suspect that most individuals will shift consumption activity to a personal tablet, and perform creative and administrative tasks on a shared PC. There will be some individuals who retain both, but we believe they will be exception and not the norm. Therefore, we hypothesize that buyers will not replace secondary PCs in the household, instead allowing them to age out and shifting consumption to a tablet.”
“This transformation was triggered by the availability of compelling low-cost tablets in 2012, and will continue until the installed base of PCs declines to accommodate tablets as the primary consumption device,” Ms. Kitagawa continued. “On the positive side for vendors, the disenfranchised PCs are those with lighter configurations, which mean that we should see an increase in PC average selling prices (ASPs) as users replace machines used for richer applications, rather than for consumption…. Our early research indicates that there was good growth in professional PC sales.”
While it’s impossible to predict how this will all eventually shake out — and it will always be a moving target anyway as innovation continues, what seems clear is that Frank X. Shaw is right about the PC or Post PC or whatever we choose to call it enjoying a bright future. It’s going to be typically more portable. It’s going to be more Cloud-oriented. But it’s going to continue revolutionizing the way we work and learn and communicate and conduct our business.