macroeconomics can't explain it

If the economy’s to blame, why are tablets surging even as PCs crash?

October 11, 2012
Obsession
Mobile Web
October 11, 2012
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An Apple Store employee shows an iPad2 to a customer in Beijing, China(AP / Alexander F. Yuan)

Technology analysts’ increasingly creative–and lame–excuses for the weakness of the PC industry just don’t hold water. For the first time in 11 years, growth in the PC market will be negative for 2012. Mostly, this negative growth has been blamed on weakness in the global economy. But if the macroeconomic factors are to blame, why are sales of tablets exploding?

It’s simple, says Nokia mobile industry analyst Horace Dediu: the reason that PCs are weak is that they are simply being replaced with tablets.

My hypothesis is that the new products are solving new jobs for the users and those new solutions are trumping any “softness” in demand. […]

One product will be met with “Why should we buy it?” and the other by “Why shouldn’t we buy it?”

The transition from PCs to tablets as the primary portal to both applications and the cloud represents a titanic shift in the industry, and will see the rise of formerly marginal players like ARM (which makes the power-sipping chips that are the brains of the majority of smartphones and tablets) and the decline of giants such as Intel and Microsoft. This transition will also allow for an explosion of diversity in device types, interface and modes of interaction.

We are already seeing an incredible diversity in regional manufacturers catering to the tastes of their home markets–names that rarely make it into the press, such as myPhone in the Philippines, and an impressive array of retailer-built phones in China. Many of these manufacturers are working on phone-tablet hybrids or releasing tablets of their own. In addition, the combination of cheap ARM microprocessors and the efficiency of manufacturers in China’s Shenzhen region means that credible 7-inch tablets are now well under $100.

Now that hardware is a commodity, and a cheap one at that, the only differentiator that is meaningful is something that has long been absent from the relatively static array of PCs that roll out every year–customization. Computing, in other words, is about to become personal again.

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