PCs Are in a Permanent Decline
– And PC Players Are in Denial
– Apple Will Take in Most of the Tablet Industry’s Profits
Barclays Capital’s hardware analyst Ben Reitzes says the slow
decline in the PC market will continue and the hole they leave
will be filled with tablets and smartphones. That’s a major
problem for the Wintel duo Intel and Microsoft, which have not
shown, not yet at least, they can compete in the mobile
hardware markets. It’s also a problem for their dependents,
the PC makers such as HP and Dell, which have not shown that
they can produce successful tablets or smartphones.
Reitzes says tablets and smartphones are replacing PCs in
markets that seemed safe for PCs a few months ago, such as the
corporates and education. As the new devices are purchased for
new applications, the PC replacement cycle is being extended.
There are two other factors, too, that Reitzes did not
– Windows 7 is far and away the best operating system that
Microsoft has ever developed in terms of reliability and the
ability to automatically sync a PC to other devices, such as
– Few of the hardware improvements, such as processor speed,
have made much of a difference in the PC’s performance. When
is the last time you heard someone say they were rushing out
to buy a new PC because it had a new whiz-bang processor?
Reitzes believes a new generation of consumers and IT workers
are figuring out how to compute differently than those that
started using PCs in the 90s by relying more on mobile devices
and the cloud. So PCs are seeing “significant task
infringement” by the day.
Damning all the PC players, he said, “After years of denial,
most PC industry players still don’t seem to realize what is
happening — and don’t have contingency plans.”
He predicts the 350-million-PCs-shipped years are ending and
that in a few years, the PC replacement cycle will be a year
or two longer than it is now. The result he predicts is that a
decline of 50 million to 100 million PCs by 2015. That’s only
a bit more than two years away.
Reitzes expects 182 million tablets to be sold in 2013, an
increase from his prior estimate of 146 million. He predicts
that’ll be 268 million by 2015, and perhaps 300 million by
2016. The majority of those, he said, will be? You guessed it
— iPads: 61% in 2013 and 2014, 60% in 2015 and 59% in 2016.
And, he says, Apple will rake in the majority of the profits
from the sales of tablets. He said, “Even with near-term
margin pressures, Apple should still generate a
disproportionate share of profit in computing over the long-
That will surely rattle the boardrooms at Intel, Microsoft,
HP, Dell and the other PC dependents.