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The big bang theory of computing

HP’s CEO Meg Whitman admitted that, when iPads are included, Apple will overtake HP as the world’s leader in computer shipments.

“We need to improve our game and our products to take over the leadership position. Apple could go past HP in 2012. We will try to become the champion in 2013.

When the quarterly shipment data is seen as a chart the doubt of this happening disappears:

 

 

 

 

 

 

 

 

 

Note that the combined iPad+Mac has already overtaken Dell. In fact, the iPad alone overtook Dell in Q3 and might overtake HP in two quarters.

 

 

 

 

 

 

 

 

 

The iPad is growing at an average of 170% y/y (average of two quarters) while the Windows PC market is growing at an average of 1.9% over the same period (source: Gartner, company reports). The

Placing the iPad in the “competitor” category is an important admission for a PC company. Categorization choices make all the difference when thinking about strategy. The new tablet product may not appear at first glance to be competitive with the current definition of a PC (though it might very well be a personal computer.) But definitions tend to evolve. Categories are abstractly defined. The original PC was certainly not competitive with Mainframe computers and perhaps it still isn’t. But that does not mean that usage (and hence value capture) did not migrate. Most people today would say a PC is a “real computer” and the Mainframe is simply an old computer.

Whitman notes that the iPad is not the only computer people use and most have a PC as well. That may be true as it was true when the PC was new. Most companies that supplied PCs to workers maintained large computers for “mission critical” applications like accounting and engineering. The two technologies lived side-by-side for many years. In fact, in the beginning there was a thriving market for software and hardware that would allow PCs to be used as terminals to access central computers. It wasn’t until PC servers and server software like that from Novell and networking from 3COM became commonplace that mainframes and minis began to fade.

So in practice, there was no big bang start to the post mainframe era. The evolution of the PC went through stages. It was an isolated local computer, a client-server solution and then finally a web-enabled communication product on its way to ubiquity. But the era did change.

So if history serves as a guide, the displacement of the PC won’t come from a direct substitution but a more sinister and hard-to-predict subversion through new applications and a re-definition of what a PC is. The driving forces are not just volumes but new input methods, new user interfaces, new jobs to be done, new software and many innovative companies working within an ecosystem.

If there is one difference today it’s that things are happening a lot faster. A transition that took a decade is happening in three years today, even though the entire market is orders of magnitude bigger.

When I visualize the cycle time of technology change, I see it as the waveform to the left: as cycle time decreases (i.e. frequency increases), the opportunity (amplitude) also increases.

  • Ravi

    Do you have enough data to add Lenovo to this graph? I remember reading somewhere that Lenovo is also hot on HP’s trail, so I’d be curious to see how they look in this picture.

    • http://www.asymco.com Horace Dediu

      Sure. Lenovo was 12.579 million in Q3.

  • http://franksting.net.au/ Gavin

    Whitman’s comments seem logical at face value, but upon further thought require more assessment. They are clearly a 180 degree turn from the position HP appeared to be in just a few months ago when they were considering offloading the PC business entirely.
    Can this then be taken as a message to the market that “PCs are still our core business”.
    HP is a big company, I’m sure they can focus on more than one prize, but an extreme assessment might also indicate recent software and services acquisitions should be seen as complementary or secondary to that business.
    Thoughts?

    • Marcos El Malo

      I have some thoughts on this and I’m glad you asked.

      Whitman has also been in a quandary over WebOS and has put off making a decision after the company pulled back from selling it outright (perhaps after not finding any buyers).

      I see Whitman’s statement serving two purposes. One is to buy some time for herself to turn the company around. She is describing the challenges HP faces and suggesting she has a plan to retake the lead. The second is that she is telegraphing that the company will recommit to developing the WebOS platform. I think she held back because she probably wants any announcement of renewed development of WebOS to be a big marketing event. But she is definitely sending a signal to developers, in my opinion.

      • Anonymous

        HP doesn’t have the money to make WebOS a legitimate competitor to Apple and Microsoft in the PC market.

      • http://www.facebook.com/people/Shameer-Mulji/1685212657 Shameer Mulji

        sure it does.

  • http://ximagin.co/thecw/ The CW

    If new input methods and user interfaces are the key to disruption and if the current disruptions are touch (iOS) and voice (Siri) one wonders who in the current marketplace could challenge Apple’s dominance. The hardware manufacturers have been relying on Microsoft to provide the user interface and the specs for the input methods. They have no experience developing smooth, simple user experiences. Microsoft has also never had innovation of new user interfaces or input methods as a strong suit.

    Meanwhile, Steve Jobs built an organization specifically suited to develop those breakthrough technologies.

    Time will tell.

    • Anonymous

      In general, I agree that Microsoft has not been a UI leader, however Kinect appears to be an exception at least within the domain to which it has been applied.  It remains to be seen if there will be a compelling use of the technology elsewhere. 

      • http://www.facebook.com/people/Shameer-Mulji/1685212657 Shameer Mulji

        Actually if you look at the Kinect Futures video MS released about two to four weeks ago, you’ll see the potential for disruption that Kinect or at least the technologies behind Kinect has.

        MS will be releasing a Kinect SDK soon for the PC so we should see some really slick applications in the not-too-distant future.

      • Walt French

        Perhaps you’d amplify how these could significantly change mobile and/or desktop experiences, or how their existence could promote XBox to a much wider role?

        I see Kinect as a great innovation for gaming, but for about the last half century, computing has been about manipulating hundreds or thousands of small objects (characters, charts, red eyes), for which gross motor recognition (and that IS what we’re talking about, no?) are quite mismatched. Terrible feedback on how far to slide the insert cursor, etc. What will it do?

        I’m aware that I don’t always understand revolutions, perhaps I focus too much on fine-tuning the tried & true. Still, I don’t get it, and you seem to think that you do, so could you share?

  • Gerry

    Brilliant Article, more data would make it even better. more manufacturers and profits would be good.

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  • http://twitter.com/VisualignCorp Visualign Consulting

    Interesting article, although the title should have a question mark at the end as the content seems to refute the thesis that computing (or innovative disruptions in the field) evolves in big bangs.

    Certainly the iPad will replace a lot of former PC use cases. When introducing the iPad in 2009, Steve Jobs rightly stated that the (then hot) NetBook wasn’t better at any of the use cases it was touted for (web surfing, video, email, games, etc.). As hindsight shows, this was in big part due to Mircosoft (and to some extent the entire PC industry) being trapped in the innovators dilemma of the Wintel monopoly. With better form factors (ultra thin tablet), new input method (touch) and operating system (iOS), lower power consumption CPU (ARM) and new software delivery paradigm (App Store) Apple created a new platform and ecosystem. I agree that its classification by competitors as PC is a key indicator.

    The notion of accelerating changes in the last paragraph reminds me of Ray Kurzweil’s Singularity concept: If the pace of change accelerates fast enough, in theory you’d get an infinite number of changes in finite time. In practice, however, there appears to be a limit from the human capacity to absorb and respond to change. Remember when Toyota and other car manufacturers reduced their car model refresh cycles thanks to better production systems in the 90’s? It got to a point where used cars lost their resale value as they appeared to age more quickly and people didn’t want a new model every year or faster. Besides, there are only so many human senses and hence input methods, so I don’t see how the rate of change could be ever increasing. Time will tell…

    • http://www.facebook.com/people/Shameer-Mulji/1685212657 Shameer Mulji

      Correction – Steve Jobs introduced the iPad in 2010.

  • http://www.informationworkshop.org Mark Hernandez

    We can say that things are moving (continuously, without boundaries) along at least three dimensions:

    1. Raw computing power
    2. Portability
    3. Application types

    First, the other day I was fixing my friend’s plenty powerful desktop computer which is a 1.2 Ghz Gateway.  The iPhone 4S in my pocket has greater computing power in raw gigaflops.

    Second, think about the increasing smear with portability from a mainframe which cannot be moved, to a desktop PC that can, to a laptop, to an iPad, to an iPhone.

    Third, think about the types of applications that can run on this range of machines.  We have a mix of things that cannot work well on an iPhone such as word processing, to things that work well in all places such as rotating molecules in 3D in real time or playing video games, to things that work well ONLY on a handheld such as when you hold your phone up to the sky and move it around and see the stars, planets and constellations overlaid in real-time using augmented reality.  A mainframe can’t hold a candle to a handheld with some application types.

    So what we have here, of course, is the ongoing and sadly never ending battle with definitions.  Therefore, what Meg Whitman is saying, with respect to UNDERSTANDING ACTUAL REALITY, would seem to be only meaningful to HP internally.  

    Well given all this, we have a choice.  We can stay stuck with conventional measures of things, as with Gartner and NPD, etc, which have less and less usefulness as time goes by, and increasingly cause confusion and endless arguments….

    … or we come up with a new way of looking at this and new measurements of what we’re REALLY talking about, worthy of the 21st century.

    Our means of measuring this needs to be changed, dare I say “disrupted.”

    What’s really interesting to me is how people will read what I just wrote, and they go “uh huh, that’s true” and then everyone quickly reverts to old-school ways of looking at things, because it’s easier to upgrade computers than it is to upgrade people’s thinking patterns and points of view.

    Oh, well.  We try. I know Horace and most readers here understand this. Upgrading thinking patterns of the general public is an interesting topic.

    • davel

      Your 4s has more power than a supercomputer of years ago.

      I agree that computers will get more portable. They will get smaller and embedded in new materials. As for application types that will change too.

      I am not so sure the rotating molecules in real time works well in the various forms of computers. If it is just a function with a small amount of data then yes. But if it is crunching large datasets then no. Phones are severely limited in storage and memory, but have powerful processors. The other example about holding the phone to the sky is not really true. Yes you cannot pick up a mainframe, but a camera with an interface wireless or not can be shown to the sky and processed by the mainframe. It is more a function of the input device.

      • http://www.informationworkshop.org Mark Hernandez

        It appears we actually agree.  

        The takeaway is that regarding the three things I mentioned, the computing power is now more than adequate for just about any application type across the full range of portability, and what one actually does on the different form factors depends mostly on what’s appropriate for that form factor.  

        Each form factor has its constraints (size, battery life, pick-up-ability), but the point is that what constitutes “a computer” in now an arbitrary definition that’s being left in the dust.

        Go and download the free “Molecules” app.  I’ve been in development for 40 years, and one day in the early 80s I was working at La Jolla Cancer Research Foundation writing software for them that looked up their custom gene sequences in the National Gene Bank and someone invited me to go across the street to Salk Institute and see them rotate molecules in 3D on an Evans & Sutherland machine (extremely expensive).  It stuttered along, but all our jaws dropped. Now you can do it for free, and as smooth as silk in an app on the iPhone/iPad.  It’s the same software, but there’s the illusion that it’s a toy and not the real thing.  I know otherwise.  It’s not a toy version.

        Star Walk & Solar Walk are just two iPhone/iPad apps that not long ago would only have been working in the labs at Cal Tech on their UNIX mainframes drawing from large data sets.  These aren’t toys either.  The large data sets are living ON my device, not the full data sets, but as much as needs to be, and it’s a lot (the interactive 3D movement and real-time rendering and actual positions of actual planet surfaces notwithstanding.)

  • http://twitter.com/pedrocandrade Pedro Andrade

    Thanks for another great article!  Here are two suggestions for future ones: 

    1) Analysis of the growth trajectory (revenue and profit margins) of Apple after SJ’s exit in 1986 until the debacle in 1994-1997. How fast did it grow and for how long could it milk the franchise? Many people are still wrapping their heads around the fact that Steve is gone and management needs to be tested without him. That’s fair, although in my view these guys have more than proven themselves already. In any case, it would be interesting to see what even a suboptimal team with the wrong values (as SJ characterized Apple under Sculley) can do when it has great products in booming markets. What would a great team be able to do?

    2) Historical analysis of mega capitalization stocks, such as Apple today, and their multiples when they got to their tops. Another thing people talk a lot is about “the law of big numbers” and that “nothing this big can sustain itself for long”. It’s another sensible point, but I wonder in how many situations in the past we’ve had such a mega cap with such amazing growth and so tiny multiples (Trailing EV/FCF: 8!). The tech bubble for example brought many of those such as Cisco at half a trillion dollars, but people forget the multiples!! Apple has the profits and the cash to show for its market value, actually to much more…

    • http://www.asymco.com Horace Dediu

      I don’t think there have been so-called mega cap stocks growing earnings at 80%. It’s possible that the anomaly is so great that markets fail to absorb the information. Markets are far from perfect or efficient.

      • Anonymous

        Yes, Horace. That’s exactly the point. Apple is an anomaly. Quarter after quarter after quarter, its revenue and earnings surprise. And each time, the market tries to respond by pushing up the stock price. But then another quarter comes along and – BAM! – once again the market underestimates Apple’s capacity for growth. This, and this alone, is all that is needed to continually compress the P/E ratio. In short, the incredible shrinking P/E ratio is simply a by-product of the phenomenal growth of a mega-cap stock’s parent company.

        Even last quarter, the move of the iPhone upgrade to the last quarter from the second to last quarter, which appears to make the analysts look like they predicted correctly, was a simple shell game that explains the huge miss in the previous quarter. My theory also predicts that, in the present quarter, the professional analysts earnings estimates will once again be way off.

  • RobDK

    iPad sales increased by 50% from Q310 to Q410. 

    So with Apple at about 10m iPads/quarter in Q311, it is possible that Apple will equal or overtake HP in Q411 with 15+m units…

  • Kizedek

    Tiny editing suggestion, last sentence:
    “When I visualize the cycle time of technology change, I see it as the waveform to the left: as cycle time (frequency) increases, the opportunity (amplitude) also increases.”

    I see the frequency of the wave increasing, by which I understand cycles (of upgrading, disruption, or innovation, etc.) are coming thicker and faster. But doesn’t that mean the time (per cycle or betweeb cyckes) DEcreases? Therefore, I might word it like this:
    “When I visualize the cycle time of technology change, I see it as the waveform to the left: as time per cycle and time between cycles decreases (frequency increases), the opportunity (amplitude) also increases.”

    • http://www.asymco.com Horace Dediu

      Yes, that’s what I meant.

  • poke

    I think the iPad is both revolutionary and evolutionary. Revolutionary in the sense that it constitutes a new UI paradigm (along with the iPhone). Evolutionary in that it’s simultaneously a straightforward form factor evolution for PCs, similar to the evolution from desktop to laptop. I think that’s why the transition is happening so much faster. It might have been difficult to see whether you needed a PC but anyone can look at an iPad and see how it will fit in with the current computing needs. “Do I value portability?” “Do I value my hardware keyboard so much that I need it to be attached by a hinge?” “Do my computing needs require high performance?” These are all fairly simple questions for a buyer to answer and I think for many people the iPad can serve as a straightforward laptop replacement. But it’s additionally going to find a lot of new uses. So it’s doing both these things at once.

    • davel

      I think the touch UI is definitely revolutionary. The differences from point and click is more stark with the tablet form factor.

      The evolutionary angle is just that it is all a continuum. I think the difference between a tablet and pc/laptop is more stark than desktop/laptop because of the touch UI. Not that you could not ( and have not had ) a different UI than touch, but the touch interface as introduced by Apple is so much more intuitive.

      The difference between laptop and desktop is mostly about size. It is still the same paradigm and other than limited mobility it is the same. The tablet is so much more mobile and the interface forces real differences in how you interact with the computer.

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  • r.d

    so horace, you prediction for ipad this quarter is 18-19 million?

    • http://www.asymco.com Horace Dediu

      Out of an abundance of caution, I’m dialing it down to 15 million (at this time).

      • Morten Jacobsen

        It’s wise to be cautious. But I would rather see someone pointing in advance the day the iPad really takes off, and becomes bigger than the PC market. I see you more as a specialist in disruption more than mobile. So I wouldn’t blame you for missing estimates in the way I would blame others.
        I’m actually waiting for two apps to leave my Mac: Xcode and Office. I also waiting for the iPad 3. I expect that to be fast enough. iPad 1, clearly isn’t.

  • http://profiles.google.com/mcmaster.patrick Patrick McMaster

    The really interesting thing about this is that Apple was planning for this disruption 10 years ago when it started building OS X and SJ gave his keynote on the digital home. The iPod was nothing more than a prototype and proof of concept.  Microsoft has been working on the theoretical side of voice and touch, but they were unwilling to kill their own products to open the way forward.   Apple’s stock price reflects  macro economic problems.  The people with the money are more scared of losing what they have then investing in the future. MarketWatch comments are full of doom, gloom, gold bug, monetary policy complaints, and other conspiracy theories.  I am not saying that there is no chance of financial pain out there, but it seems as though Apple remains a golden goose that gets no respect.  I also agree with a commenter yesterday who pointed out that as Apple grows it forces all traditional mutual funds to sell to keep under 5% in their portfolios.  This is an opportunity for the individual investor. Opps we are all hanging on with no money available. So, Apple languishes below 400 a share.  Over the long term it will go where the profits go. Thanks for all the good charts and data.

    • davel

      I don’t know if Apple was planning for this disruption or not 10 years ago.

      NextOS was a good platform that was portable. This gave Apple the flexibility to switch to Intel as it was already done. My understanding is the iPod had whatever OS it has which has nothing to do with OSX.

      I do not know what confluence of events and technologies caused Apple to get serious about phones and tablets, but I would guess the first order of business was to stabilize the core which was the PC.

    • http://www.asymco.com Horace Dediu

      You never really plan to disrupt. You just set off on a journey not knowing where it leads but trusting your instincts. Many times you end up in a place far beyond anything you could have imagined.

      • http://www.facebook.com/profile.php?id=100000707033671 Sunil Varia

        Agreed. You  can’t plan to disrupt. 
        Steve Jobs admitted that Apple never planned to disrupt gaming industry. But iPod Touch is giving nintendo a run for its money.

  • Jon T

    Ok that does it.

    If the iPad with it’s iOS operating system is a PC, then how can anyone possibly argue that iPhone and iPod touch with the exact same capabilities or more, are not PC’s?

    To my mind, those charts, and Meg Whitman are way way out… 

    • Marcos El Malo

      It’s about the jobs they’re hired to do. There is a lot more overlap between the iPad and a desktop or laptop PC, less overlap with a phone. This is mostly to do with the form factor rather than the underlying OS.

      • Jon T

        No more overlap at all. Just that you need younger eyes for one than the other!

      • Marcos El Malo

        I was referring to the minimal overlap between phone and desktop. The questions to ask are these:

        On which device do I prefer to do a particular task? Which is better suited for the task?

        Why? What are the trade offs I’m willing to make?

        I’m not saying a phone can’t be considered a computer. Obviously, the phones we’re discussing are computers. But it’s a semantic stretch to call them PCs, even if they might replace Pcs in some cases.

      • Marcos El Malo

        By the way, Horace, I’m having a lot of trouble posting with an iPad on disqus.

      • Ludachrs

        No prob with an iphone.

      • http://www.facebook.com/profile.php?id=644846198 Ron Smith

        Before I had my iPad, I hired my iPhone to do some of the jobs my iPad does now, when I was on the road.  I still would if I did not have my iPad with me.  I was able to leave my laptop at home on some non-business trips once I got my iPhone. 

    • http://twitter.com/Janne_o Janne Ojaniemi

      The differences are getting murky, but I would consider iPad a PC while iPhone is not, due to the fact that iPad has PC-sized screen. OS is not really the factor here.

      If iPad was a “traditional” tablet-PC, and it ran Mac OS X, while being otherwise identical to current iPad, would you then considered it to be a PC? Why? What does Mac OS X have that would make iPad a PC, that iOS lacks? Windows? A pointer? What?

      Microsoft also considers iPad to be PC.

      • Jon T

        Consider webstats for example – which point to iOS devices taking 60% mobile share. They aren’t breaking out the differences between screen sizes as a differentiator for people’s choice of device for web browsing.

        What will the definition be for a 7″, or 5″ iPad be? Is it just the name ‘phone’ that causes the problem? And what happens when wifi is ubiquitous the phone networks become nothing but pipes for data, including voice?

        I honestly think it is impossible to say they aren’t personal computers, we run Keynote presentations, write documents on them and edit photographs on them. And remember that the hardware is more powerful than the average PC of 10 years ago.

      • http://twitter.com/Janne_o Janne Ojaniemi

        Like someone else said: it’s about what they are hired to do. iPads are used for “PC-like” activities more than iPhones are. Yeah, you can do same things on both (like, run GarageBand), which is why the differences are getting blurred. But we can still tell a phone apart from a tablet. That is the reason why we don’t consider game-consoles to be PC’s, even though they often have PC-hardware.

        That said, there is a radical difference between 3.5-4.5″ devices and 10″ devices. The former are clearly not PC’s. Then what about 5-7″ devices and the like? Honestly? I have no idea. Like I said, the differences are getting murkier. I guess it’s safe to say that we know a PC when we see one.

        5-7″ devices and the like are IMO pointless (and I don’t think that we will see an iPad with such a screen). They are not proper phones since they are too big. But they are not proper tablets either, since they are too small. You can’t optimize the software for either device-type, so you get a device that has worst of both worlds.

      • Jon T

        I agree with you, smaller would not be ideal for me either. But I simply do not discount the possibility that a portion of the population would find 7″ more useful than 10″ – were Apple to create it which is a moot point of course.

      • Eric D.

        Actually, it really does make sense to think of the iPhone as a PC. You can mix music or edit video on it. Balance your checkbook. Read the latest news. Play some very intense games. Dictate memos. 

        Yes, the size of the keyboard limits functionality. But when the day comes that the iPhone can be stood on one end and project a virtual screen and keyboard onto the desktop, won’t that render moot the size issue?

        Apple has been selling a whole new line of computers since 2007 but has cleverly disguised them as phones. Horace should add the iPhones and iPod Touches to the chart and compare that to Samsung’s PC + smartphone numbers, Rim’s phones, HP and Dell’s PCs. It’s time to face the music.

      • Anonymous

        Murky is right! I mean is it really about screen size or resolution? I mean an iPhone has the resolution of a netbook doesn’t it? And, it has far greater resolution than the original Mac.

        A 10″ screen with one pixel doesn’t make for a great screen, but a 3.5″ screen with 960×640 pixels is pretty awesome.

    • http://www.asymco.com Horace Dediu

      Don’t compare specs or capabilities. Compare the jobs they are hired to do. An iPad will eventually do most of what you currently hire a PC to do (though while doing it you may not recognize you’re doing it). It’s unlikely that an iPhone will be hired for the same jobs. For this reason many functionally identical products are hired for different jobs, simply because of the positioning or a minor difference in the way they are sold. Think of the difference between how we hire digital cameras in phones from film cameras of years gone by. They both take pictures, but the old cameras were used for remembering special moments. New phone cameras are used for all kinds of quirky spontaneous creativity.

      • Morten Jacobsen

        I “feel” that the iPhone is my PC. It simply feels the most personal and intimate device using my data and media. Even when writing on my Mac, I write to my iPhone. The iPhone is the tool I’ve hired!

        iCloud is a main driver. Before iCloud, it was a lot of work to move data to and from my devices.

        My iPhone, it started with the 3G, took over PC tasks from day one, both consumation and creation stuff. For each version, the iPhone takes a bigger part. 

        When I got the iPad, it took some stuff from the iPhone and some from the PC. My iPad work was hampered by lack of synchronisation and the required.

        The iCloud, is the gamechanger. I could characterize my PC as the iCloud and my mobile devices, and that’s including Apple TV.

        So I actually has four versions of a personal computer with different screen sizes.

        I expect Siri to contribute further in the thansition of IT from desktop to phone.

      • unhinged

        I’m _really_ hoping you meant “consumption” not “consumation” [sic] above. :)

      • Just Iain

        My thought exactly. But, to each his own!

      • Anonymous

        You bet! Thanks a lot!

    • Anonymous

      The difference is the apps. There are only 2 kinds: PC apps and phone apps. PC apps require a 9-10 inch screen. If you have a smaller screen than that, you can only run phone apps, which only require a 3-7 inch screen and have simplified interfaces.

      In practical terms, on an iPad, you can open a Web page or PDF page and read it without zooming; you can run “desktop” Web apps instead of “mobile,”; you can run games and apps made for PC in their original PC/console interfaces, except with touch added.

      Another way to look at it is 1-handed or 2-handed apps. iPhone is running 1-handed apps; iPad is running 2-handed apps like Mac and Windows.

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  • Tatil

    I understand the transition to post-PC would not be sudden even among the people who buy tablets, but it is still quite interesting that rapidly rising iPad sales has not affected the sales of the two of the biggest PC makers. Sales curve was flat before iPad, still flat after… So far, iPad seems to be an “additional” purchase rather than “instead of”, or maybe “instead of a Mac laptop” more than “instead of a PC laptop.”  

    • http://www.facebook.com/profile.php?id=703848523 Harvey Lubin

      “So far, iPad seems to be an “additional” purchase rather than “instead of”, or maybe “instead of a Mac laptop” more than “instead of a PC laptop.”

      In reality, the opposite is true.

      Mac sales have been growing with each quarter, while sales of all other PCs have been dropping consistently for the past few years. It’s very clear that sales of the iPad are eating into sales of Windows netbooks and notebooks, while sales of Macs are growing due to the iPad “halo effect”.

    • http://www.asymco.com Horace Dediu

      It has affected the fortunes of some other vendors, especially those who were selling mostly netbooks.

      • Tatil

        US must be the biggest market for iPad, so it is natural to treat the US market as canary in the coal mine. iPad has proven quite popular in the US, where Dell and HP have strong market positions, but their sales did not drop despite iPad’s success. Asus and Acer, the famed netbook makers, were never that successful in the US anyways. 

    • http://twitter.com/jamesesaldana studentrights

      PC growth has stopped and now is being picked up by the iPad. So they have been affected, sales are not growing as previously predicted. It may not be long, a year, before we see the decline.

  • davel

    I agree that PC’s will never actually go away. At least in the next 10 years or so. Just as mainframes are still here after they were declared dead years ago. The death of mainframes is more a function of the dying off of mainframe programmers than the functionality of the machines themselves.

    • KenM

      It’s the mainframe programmer jobs that have been “dying off”, not the programmers. There are more mainframes than ever but they are an order of magnitude smaller and cheaper. Also they support modern software development environments which require far fewer programmers.

    • Laurent Giroud

      I’m pretty confident they’ll go away too at least in the home.
      The advantage that PCs have over tablets are mainly processing power, rapid input (via a keyboard), display surface area and wired (hence faster) access to a network. Some of them are going to go away as nowadays appliances are computerized (TV), Wifi speeds get higher, wired networks support full screen resolution transfers (cf Thunderbolt) and Moore law makes the difference in processing power less and less noticeable for the non technical user.It seems highly unlikely that voice input will be useful for inputing an excel sheet and the mouse is still unprecedented in precision as an input device so that essentially means that the future PCs will be distinguished only by their input methods. And that is assuming that the average household will want to create excel sheets which is not a given.Provided it can be extended easily a single computing/networking hub would be enough to fulfill the needs of a household so the only visible remains of PCs would be the small box hosting this hub and a few wireless keyboards/mice scattered all around the house close to what probably would look like a current iMac.

      This hub could even be hosted in a big screen TV: there’s enough room there to store the equivalent of a MacPro in terms of processing power and that could even be a replaceable module linked to the display via Thunderbolt. I doubt this is what Apple has in mind but I wouldn’t be surprised at all if the Apple TV turned out to be the first step toward such a system.

  • Anonymous

    Hi Horace, one additional data point to further illustrate the excellent points in your article.  On average, approximately 30% of non-business PC usage is content creation and 70% is content consumption. Clearly, the iPad is more versatile, easier-to-use, and most importantly, more fun, for consuming content.
    So, just as the PC’s initial disruption of the mainframe was just “doing some jobs better,” out of the gate, the iPad does up to 70% of the PC’s “job” better for most consumers. As technology (hardware, software, and network) evolves, this percentage can only grow.  -Bert

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  • http://www.facebook.com/james.scariati James Scariati

    I love this article. One of your best, Horace!

    Whenever I hear anyone dismissing the iPad as a “toy” or not a “real” computer, it just makes me think of how the Mac was dismissed in the exact same way. I don’t think iPads will ever replace 100% of the functions of a PC – just like how PCs didn’t replace 100% of the functions of a mainframe – but in time, that won’t actually matter. Our usage and our definition of what we call “computing” will shift over time toward what the iPad is best at, while the traditional PC will still be used, but more as a niche device used mainly for the few tasks the iPad can’t handle.

    • Anonymous

      Notebook computers can’t do all the things that desktop computers can. We are used to giving up something to get a much smaller form factor. What matters with iPad is it’s easy for users to adopt it for PC tasks and it’s easy for developers to port PC apps to it (full-size PC screen, PC class native C/C++ API.)

      The PC was ripe for simplification. With Mac OS X, Apple simplified the UNIX workstation, and with iPad, they simplified the Windows PC. People who go from Windows XP to iPad go 10 years into the future

      • http://www.facebook.com/people/Shameer-Mulji/1685212657 Shameer Mulji

        So in other words, Tablets are like cars, desktop / laptop PC’s are like trucks.

  • Morten Jacobsen

    It’s big fun when HP’s CEO Meg Whitman says that. I think the story is even worse for Windows. It seems to me that Apple did lose the battle with MS in the nineties, but it won the war!
    It will be nice to cite Whitman, when someone tries to use Windows as a reason for that iPhone will loose to Android.
    Great post Horace!