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Get Ready for the Post-PC Era

The post-PC era is sneaking up on us. The invasion started years ago as convergence accelerated and as manufacturers began merging functionalities into single, mainly wireless, and highly portable devices.

The intention was not to render the PC obsolete, but as more functions initially carried out on the device get incorporated into smaller form-factor equipment, the utility and pervasiveness of the PC will be eroded. One day, in the very near future, the PC will most likely lose its ranking as the single most important electronic device of the current generation. It will also lose its status as the No. 1 destination for semiconductor parts.

There are significant implications of such a development for the global electronic market and especially for a supply chain system that has over the years worked primarily to serve the PC sector. Already, many of the players in the PC market are redefining their presence and continued service to the sector. The ranks of DRAM and other memory components used in PCs, for instance, has shrunk, with no more than five companies considered serious players and even fewer — about three, by some estimates — seen as viable long-term enterprises.

Currently, the top five players in the DRAM market, according to {complink 7427|iSuppli Corp.}, are {complink 4751|Samsung Electronics Co. Ltd.}, {complink 12912|Hynix Semiconductor Inc.}, {complink 1769|Elpida Memory Inc.}, {complink 3421|Micron Technology Inc.}, and {complink 12913|Nanya Technology Corp.}, in that order. By the time the market winnowing is complete, only Samsung, with a 35 percent market share, and Hynix, at 22 percent, are likely to remain competitive. The others must fight for relevance and survival. Hopefully, their products will also get designed into the other equipment that's eroding the PC's support base.

Perhaps no other company is as welded to a more uncertain future without the PC than {complink 2657|Intel Corp.}, the world's biggest semiconductor company. In the third quarter, Intel's PC client group reported microprocessor, chipset, motherboard, and other product sales of $8.1 billion, accounting for 73 percent of total company sales. The data center group and other operating divisions accounted for the balance of $3.1 billion, or 27 percent. In other words, without PCs, Intel would be a significantly smaller player in the electronics industry.

This explains why Intel poured billions into acquisitions at the beginning of this decade in an effort to establish a position in non-PC markets. Those efforts did not yield the results Intel wanted, but recently the company has moved back into aggressive acquisition mode — this time to broaden product offerings in wireless handset as well as portable devices such as tablet equipment from companies like {complink 1544|Dell Inc.}, {complink 2376|Hewlett-Packard Co.}, Samsung, and other manufacturers that can use Intel-based platforms. {complink 379|Apple Inc.}, the more dominant consumer electronics company today, is a potential but unlikely Intel customer in the space.

Other major segments of the electronics market that will be hit as PC sales slow, stagnate, or even begin to decline include EMS providers that are heavily dependent upon the sector. Starting about five years ago, some of the major contract manufacturers have withdrawn from servicing PC OEMs largely because gross profit margins in the segment have sharply declined. Other component suppliers could also suffer unless they get their products designed into alternate devices.

It's certain that the electronics supply chain landscape will be vastly different without the PC, but nobody expects the product to go poof and disappear. The PC remains utilitarian, and for millions all over the globe it will remain the primary Web access tool and also the main equipment for heavy-duty, sit-down applications.

The day may still come when the PC becomes outdated, but that's still years away. In the meantime, though, it's not such a farfetched idea considering the explosive growth seen now in smartphones and expected for tablet devices. As noted previously, the market started shifting when manufacturers began herding functions like messaging, paging, word processing, camera — still and video — as well as music/audio and time management applications into a single device. This shift ended the reign of pagers, some standalone music players, and {complink 8261|Palm Inc.}'s famous Palm Pilot.

A new era is beginning and the PC could be the next casualty. Is your supply chain prepared?

17 comments on “Get Ready for the Post-PC Era

  1. Ms. Daisy
    December 21, 2010

    Thanks for bringing this reality to life in a simple yet absolute manner. I guess the future is speed, portablility, and simplicity of access to information. I am definitely in support of merging multiple devices into smaller and more portable device. Unfortunately some companies will need to fold up or join the self transformation movement to meet consumer demands. With Samsung taking the lion share will there be a monopoly of some sort if the smaller suppliers join Samsung to survive?

  2. Himanshugupta
    December 21, 2010

    I disagree with the article's main suggestion that we should prepare for a post-PC era. Rather, i would say that we should embrace for an integrated consumer electronics era with some smart (maybe PC type) device at an epicenter. Memory and microprocessor will remain the focal point to improve the performance of an electronic device so i do not think that companies like Intel should really be worried about diversifying their business unless they worry that they can not innovate anymore.

  3. bolaji ojo
    December 21, 2010

    Intel isn't worried about now but it is not kicking back because it is and should be concerned about the direction of the market. The PC is still a core product for IT professionals but mobility is powering the next-generation of products. Wireless and portable devices are growing faster than the PC sector and Intel has a reason to be concerned. The microprocessor that goes into PCs will not go into a wireless tablet or a smartphone. Smaller form factors are required here. Yes, microprocessors and memory products will still be at the center of future products but not in the same format. The Post-PC era is on the horizon and smart companies are preparing for it.

  4. t.alex
    December 21, 2010

    Isn't it relevant to bring the definition of 'PC'? Can we consider those all-in-one integrated touch screen LCD monitor cum mainboard+harddisk also a PC? I would not say PC will be completely obsolete so soon – maybe in at least 5 years. Given the computing power it can offer as compared with mobile devices, people still need it for everyday job.

  5. mfbertozzi
    December 22, 2010

    I agree with t.alex; maybe personal desktop in the shape of “tower” will be away in few years from now, nevertheless several of us are using yet different microprocessors in their job. If PC definition means “microprocessor to support individual productivity” I believe we are not facing a new era but basically the evolution of electronic tools to support us in our daily activity and personal communications.

  6. Ariella
    December 22, 2010

    I don't claim to have a crystal ball or even to have the expertise to make a prediction about the future of the PC. However, from what I hear from people who do claim to be experts, mobile devices are hailed as the future for internet access, communication, and possibly other functions that have been the domain of the PC. Perhaps the PC will evolve into a PPC — a portable personal computer  — as smart phones get smart enough to be called computers.

  7. Taimoor Zubar
    December 22, 2010

    @Bolaji: I think Intel is in a fairly good position at the moment even if the dynamics of the PC market are changing. It has already started making products for tablets and has been fairly successful with it. As you mentioned that Samsung and HP have built their tablets upon Intel platform, the only competition to Intel at the moment seems to be Apple. Since smartphones are also in competition with tablets and PCs, Intel should also make it's target to step into the smartphone market. This would ensure that it maintains a strong market share despite the drop in PC sales.

  8. Backorder
    December 22, 2010

    I think this article has pointed out all the implications of the post PC era. And truly that era is upon us now. Those who are unwilling to realise this will only lose significance in the coming days. And, Intel is in no way shying away from this reality. The breadth of acquisitions it has carried out is a clear indicator to this. But the question remains, whether acquiring instead of inculcating will help it tide over and retain the lion's share when we move to a new age of computing?

  9. Ms. Daisy
    December 22, 2010

    Himanshugupta   

    As long as the idea moves to “PC-type” consumer electronics then you are agreeing to the fact that the PC will soon be obsolete. Integrated electronics is what the consumer wants and yes the devices will always need a memory and some form of microprocessor, but the likes of Intel better place a close attention to improving the performance of their current lines of electronic devices or they will be calling for a merger with Samsung or Hynix.

  10. eemom
    December 22, 2010

    I guess the question I have is what do we mean when we say soon?  The Portable PC is not going anywhere anytime soon.  I agree that the desktop will be obsolete within the next couple of years with everyone going portable, but I agree with the others that see plenty of life for the portable PC.  The PC will change however to converge on new technology with smaller form factor that carries more processor horsepower.  I think over the next 5 years, we will see the PC and tablets markets converge and not necessarily one winning over the other.

  11. Ms. Daisy
    December 22, 2010

    The personal computer (PC) as we know it now will change to portable devices, portable PCs with integrated functions and services other than word processing.

  12. prabhakar_deosthali
    December 23, 2010

    It seems certain that todays PC may be obsolete in the coming years. It is the way mobile phones and digital cameras have displaced the film cameras .  I believe that though the portable devices ( smart phones, tablets and what not)  are giving a lot of PC like functionality the leisure of seeing the information on a large screen can only be given by a TV in your living room.  I would say that the smart TVs with 3D technology,  and PC like functionality will replace  todays traditional desktops whereas the mobile devices will replace the laptops.  Whatever be the outer product the inside hardware will remain somewhat the same -CPU, memory, network connectivity and plugin peripherals.

  13. t.alex
    December 27, 2010

    Most likely the future 'personal computing' devices will rely on the power of 'cloud'. I remember google is doing some laptop which is running just a browser!

  14. saranyatil
    December 28, 2010

    hey i definitely agree with you its very certain that desktops will become disused since people prefer to use all the features on a tablet or their phones as it s convinient to carry and use since this is the era of multitasking they can watch movies and also do the other jobs in their tablets or laptops this makes life more simple and easy

  15. Anna Young
    December 28, 2010

    My son got a Barnes and Noble e-reader for Christmas and I have been using it to surf the web. It's a pretty nifty device but from what I've read it is not up to the level of the iPad, which makes me eager to get my hands on one of these devices. They are easier to carry around than a laptop notebook, they are more useful for websurfing than a smartphone and I can whip one out in a flash to check emails and do a bunch of other stuff anywhere there's wi-fi access.

    I would like to get one, perhaps the Blackberry Playbook, which is coming out in 2011 — I don't want to be tethered to Apple and all their company-specific requirements. Perhaps we are not looking at the end of the PC today but I bet more devices will be pressed into service replacing some of the functions the PC performs today. What I expect is that rather than have 2 or more PCs, a family may just opt for one and supplement with other devices.

  16. Clairvoyant
    December 30, 2010

    I agree that these trends will occur, yet I think desktop computers will still exist for use as high performance systems for gaming and high demanding applications.

  17. Damilare
    January 31, 2011

    the way things are going, the PCs might not be in use for long. smater and portable devices are being introduced everyday. i also think that PCs are going to become Obsolete in the near future.

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