All around us, the evidence is overwhelming that the PC world is changing rapidly and in numerous ways -- use, sales, share of the electronics/IT equipment market, application development, and, very importantly, the surrounding supply chain.
Certainly, the PC has a future in our homes and businesses, but don't let anyone convince you they know exactly how that future will look or where things will remain the same over the next five years. Within a few years, the PC market will lose its title as the dominant consumer of semiconductors -- if it hasn't already. In the near future, the leading destination for many components used in traditional PCs will be tablet and smartphone plants.
The supply chain, especially the procurement and production elements, must be focused on accelerating that transition. I don't believe that's the case today, though the trends have been apparent for quite a few quarters. As consumers have migrated toward mobile devices, especially smartphones, the consequences for PC vendors and their component suppliers have become obvious. But apparently, they aren't obvious enough.
Intel Corp. (Nasdaq: INTC), the company with the most to lose as this shift has accelerated, has worked to establish a beachhead in the smartphone market. Nevertheless, many well-meaning analysts and industry observers have continued to spout the misleading view that the PC sector is unshakeable. The general opinion for a while was that tablets and smartphones would serve as complementary products to the traditional PCs, rather than cannibalizing the market. Think again.
Paul Otellini, Intel's president and CEO, had this to say about the changes in his company's market during a fourth-quarter earnings conference call.
From a product perspective, 2012 was a year of significant transitions in our markets and a year of important milestones for Intel...
At CES last week, I was struck by our industry's renewed inventiveness. PC manufacturers are embracing innovation as we are in the midst of a radical transformation of the computing experience with the blurring of from factors and the adoption of new user interfaces.
It's no longer necessary to choose between a PC and a tablet.
Let's turn to an IDC report released Monday for further explanation. The research firm said it sees PC innovation accelerating over the next few years as OEMs struggle to stem their losses and blunt the impact of smartphones on the market. PC OEMs and chip vendors can no longer afford to be complacent, IDC said; they must compete on all levels with tablets and smartphone manufacturers to demonstrate the continued relevance of their products.
This view implies that PC vendors and their suppliers have been satisfied with the status quo until now. That would be putting it mildly. Until Apple Inc. (Nasdaq: AAPL) rolled out the iPhone and positioned it as an alternative platform for accessing the Internet, many OEMs didn't see smartphones as competing devices. IDC said in its report:
Complacency and a lack of innovation among OEM vendors and other parts of the PC ecosystem has occurred over the past five years. As a result, PC market growth flattened in 2012 and may stagnate in 2013 as users continue gravitating to ever more powerful smartphones and tablets.
Ouch. Some in the industry still believe tablets and smartphones aren't an arrow aimed at the PC market. I don't see tablets and smartphones replacing PCs in all situations, but they will encroach enough on that territory to leave a visible mark. That's why PC vendors, semiconductor suppliers, and manufacturers of other components need to develop a strategy that embraces the smaller form factors of tablets and smartphones and leverage their advantages over traditional computing platforms to create market-winning products.
Mario Morales, program vice president for semiconductors and EMS at IDC, said in a press release, "The key challenge will not be what form factor to support or what app to enable, but how will the computing industry come together to truly define the market's transformation around a transparent computing experience."
That conversation is a couple of years late, but it's welcome nonetheless.
I agree. However, I am saying that manufacturers could also create powerful processors that can literally fit in the palm of your hand that can be hooked up to a tablet. The tablet functions as a monitor when you hook it up to the mini-processor. In other words, we can have other form factors that are as powerful as PCs.
Nicely put Bolaji. Like you said having "a tablet that can hook up to a smaller and powerful processor with a flexible rollup keyboard" plus, it's portable, light and easy to store away. This is the transition we are talking about. Would we still have the traditional PCs to compliment? Hard to predict where all of these changes will lead.
@HH, Well it's a divided opinion even amongst the experts too. It's obvious that tablets and smartphones are limited to perform certain tasks at the moment. The point is tablets/smartphones PCs are transforming. Where will it leave traditional PC? I'm sure traditional PCs won't just disappear overnight. Its functions might eventually transform. Who knows?
"Some in the industry still believe tablets and smartphones aren't an arrow aimed at the PC market. I don't see tablets and smartphones replacing PCs in all situations, but they will encroach enough on that territory to leave a visible mark."
That is very well said! I am sure most PC makers are aware of that irreversible fate of the PC industry. But some are clinging fast to the idea that we will still need PCs for some/many tasks that cannot be done with smartphones or tablet computers.
Quite true, there are still some setbacks associated with the use of tablets or smartphones devices compared with traditional pcs they just can't match up (for now though). Traditional PCs still offers greater level of flexibility when it comes to mobile computing, I agree. However, it appears manufacturers are spending more time innovating tablet pcs and other smaller devices. Until the manufacturers come up with a viable solution to remedy the situation, I'm afraid the future is gleam for traditional pcs.
Anyone who argues that the PC market is dead or in severe decline hasn't joined the workforce yet. The argument is not whether or not the PC is going to disappear. I don't think that will happen soon. However, its form factor may change and that's where innovation comes in. If you have a tablet that can hook up to a smaller and powerful processor with a flexible rollup keyboard why do you need to carry a box?
It all depends on what you plan to do with the device. If you need to heavy processign work, you'll need a PC and if all you want is a device that can access the internet and do basic computing then the tablet may suffice.
I believe that also, the dilemma PC or tablet it is a fake one, and you could realize that if you buy a tablet to replace your PC, even for a regular user this, it sounds like a joke, and if you don't believe me just try it. The PC market is living and will be alive at least for the next 5 -10 years.
In a talk with an INTEL exec, he was trying to convince us of the future of the PCs, and when asked about tablets, he put the off, only to later talk about INTEL's plan to build chips designed for them.
Many people think of many devices in the future, but what about only one with different peripherals? I understand the industry will be happier with many devices but I believe one device will be enough.
The new government rules and regulations may prove to be a double-edged sword: achieving some positive goals but costing organizations a great amount of money and work and, perhaps, lost sales as well.
EBN Dialogue enables and encourages you to participate in live chats with notable leaders and luminaries. Not only editors and journalists, but the entire EBN community is able to comment and ask questions. Listed below are upcoming and archived chats.
Archived Dialogues
Thailand Stages a Comeback Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Euro-Crisis: What It Means for High-Tech Firms Join EBN Editor in Chief Bolaji Ojo and Contributing Editor Jennifer Baljko on Thursday, July 12, at 10:00 a.m. EDT for a Live Chat on high-tech and Europe's economic difficulties.
Microsoft Surface: Potential Winners & Losers What are the implications for the electronics industry supply chain of Microsoft Corp.'s decision to launch its own tablet PC? Join industry veteran and EE Times' systems and OEM expert Rick Merritt on Tuesday, July 3, at 12:00 pm EDT for a Live Chat on this subject.
Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Peter Drucker famously said "Trying to predict the future is like trying to drive down a country road at night with no lights while looking out the back window." Yet in the razor's-edge world of electronics—with a lean supply chain and just-in-time demands—the need to know the future is vital.
While no one really can accurately predict the future, we can take guidance from another Drucker saying which is the best way to predict the future is to create it.
You've heard the saying "the No. 1 supply chain risk is your people." That hasn't always been the case. But today's complex global supply chain requires a new type of multitalented employee. It's one who understands, finance, marketing, economics, is savvy with technology, graceful with relationships and can think analytically.
Where are these people? Are universities properly preparing the next generation supply chain professionals? How do train your existing workforce for these new, demanding positions?
Brian Fuller, editor-in-chief of EBN, will lead a 60-minute Avnet Velocity panel discussion that will ask and answer these and other questions swirling around today's supply-chain talent challenges.
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