DEC. 24, 2014
What do you do when you are in the computer business and the rapid evolution of mobile devices is taking share an alarming rate? Sound familiar to a situation you may be facing? Here is a way to deal with it.
About a year before he died, Steve Jobs was asked at a conference to predict the future of the market for personal computers. Back in the late 1970s, as the chief executive and a cofounder of Apple, Mr. Jobs had presided over the birth of the PC industry, but then, after blockbuster sales of the iPhone and the iPad,he had taken to describing the tech business as entering the “postPC” era. Did he really believe that desktop and laptop computers were going extinct?
He reached for an analogy. “When we were an agrarian nation, all cars were trucks, because that’s what you needed on the farm,” Mr. Jobs said. But as farming died off and people in urban areas began to buy automobiles, the auto market split into distinct categories. There were easy to use, relatively maintenancefree cars for everyday drivers, and powerful, specialty vehicles like trucks for people who needed to get stuff done. Laptops and desktops “are going to be like trucks,” Mr. Jobs predicted. “They’re still going to be around. They’re still going to have a lot of value. But they’re going to be used by one out of x people.”
Four years later, Mr. Jobs’s predictions have pretty much panned out.
Benedict Evans, an analyst at the venture capital firm Andreessen Horowitz, estimates that the number of smartphones and tablets in use around the world surpassed two billion in 2014, eclipsing the number of laptops and desktops in use. But just as Mr. Jobs argued, the rise of mobile devices has not led to the death of desktops and laptops. In 2014 the oncesharp decline in PC sales began to level off. In some ways this year was a renaissance for the personal computer as our laptops and desktops acquired fantastic new powers that made them better than ever.
One approach—the low end. We saw the rise of Chromebooks, the Googlepowered laptops that run an operating system based on the Chrome web browser, which often sell for around $200. Because they’re inexpensive and easy to maintain, Chromebooks began to cut into the low end of the computer market in 2014, and they’ve proved especially popular in education, where teachers and parents appreciate their simple design….And this year, lowpriced Chromebooks and Windows machines helped the PC industry hold steady against the rise of phones.
But there’s a question of longterm viability. How long can PC makers survive by selling cutrate devices?
Enter Apple and the new iMac it unveiled in the fall, an expensive desktop with a beautiful, highresolution screen. If Chromebooks are cars, the new iMac is the world’s best truck. It’s a device optimized for professionals, not casual users, and it blazes a path forward for the oncebeleaguered PC industry.
As phones and tablets become more powerful and useful, and as they begin to occupy more of our time, PC manufacturers will have to create computers that take advantage of PCs’ shape, size and power. They’ll have to find new features that can’t be mimicked by smartphones. With a display unmatched by any other computing device you can buy today, the new iMac does just that.
Playing the high end has proved lucrative for Apple. In the third quarter of 2014, by the research firm IDC’s estimates, Apple became the fifthlargest PC seller in the world. Though its market share is dwarfed by the Windows PC giants Lenovo, HewlettPackard, Dell and Acer, Apple is predicted to rake in about half of the PC industry’s profits. “They’re doing remarkably well.