Skyrocketing sales of tablets and mobile devices have hinted at the notion that desktop and laptop PCs — once the staple for home computing — are beginning to collect dust in many households. And now, the numbers are starting to show that: Last week, Microsoft, a company whose business depends heavily on sales of PCs and related software, announced that its first-quarter net income dropped by 22%, with revenue down 8% from a year before. That followed an earlier report by research firm IDC that global PC shipments fell by 8.6% in the last quarter.
For many observers, such data suggest that the “death of the PC” is imminent. To get some perspective on that grim outlook, KnowledgeToday asked three Wharton faculty members if they envisioned a time when the humble personal computer as we know it will no longer exist.
Peter Fader, professor of Marketing:
Declining earnings at Microsoft are one thing — they are now facing viable competitors when it comes to operating systems and office tools, so that’s all part of the natural ebb and flow of competing firms. But I don’t see any signs of a declining market for PCs. Okay, maybe the forms are changing, but I view a tablet plus optional keyboard as a PC. Maybe a smartphone is different, but anything with a screen that is frequently operated with a two-handed keyboard is a PC in my book, and that seems to be a very healthy growing market.
I predict that the forms will continue to evolve — we ain’t seen nothing yet — but for the foreseeable future, I see strong demand for a device that does the kinds of things that a PC currently does. Microsoft may continue to fade away, and even the mighty Apple will fall, but that kind of device has a very healthy future.
Eric K. Clemons, professor of operations and information management:
“Death of the PC” is like death of the mainframe: Neither is likely to occur, and, indeed, the move to the cloud has made “big iron” [mainframes and servers] more important as a share of global computing, rather than less important. The PC serves a function. Sometimes I do not want to rely on the Internet, as when I am at 37,000 feet. Sometimes I do not want to rely on the cloud, as when I am working on a first draft of a legal opinion. Where we do our computing has for a decade or more been determined by telecom speed, local PC processor speed, need for storage and local PC storage capacity, software costs, and the need for privacy and security. The balance will keep changing. [The young] “digerati” will continue to mock old guys who write coherent emails on laptops instead of sending short tweets from an iPhone. Both smartphones and tablets will have a place, but so will laptops and desktop PCs.
Daniel A. Levinthal, professor of management:
Technologies, even ones that suffer an enormous degree of substitution, tend to survive in particular niche applications. Indeed, while the volumes will shrink, so will competition, and modest margins over modest volumes can be earned.
Also, the definition of the distinct category of “PC” may be (or is getting) a bit blurred. In what ways are the new Microsoft devices PCs or not PCs? Is the definition a function of the nature of the operating system? What fraction of processing is done on the machine versus (via an app) on a server? Is it a super narrow definition which implies a microprocessor made by Intel and operating system by Microsoft?