The PC Isn't Dead ... Yet

Word coming out of the Consumer Electronics Show this year is that the PC has been rendered obsolete by newer, shinier gadgets at this year's show. Tablets like the Apple (Nasdaq: AAPL  ) iPad 2 and Amazon.com (Nasdaq: AMZN  ) Kindle Fire and others have captured not only the media's attention but that of consumers as well.

Some think that these developments will render Intel (Nasdaq: INTC  ) and Microsoft's (Nasdaq: MSFT  ) domination of the PC business obsolete. But we're far from the extinction of the PC.

Tablets for everyday use
As a writer, I'm constantly on my PC, a device that's hardly been rendered obsolete by the tablet. In fact, for many business applications the PC is simply indispensible. Spreadsheets and word processing are still the PC's bread and butter, and tablets can't yet compete with the same efficiency or ease of use.

It's true that the replacement cycle of the PC will slow, but the overall market is holding steady worldwide, even with the new competition. During 2011, global PC sales were flat with 2010 as more people around the world gained computer access.

The PC always reinvents itself
Since becoming a household item in the 1980s, the PC has reinvented itself many times. There was the all-in-one Apple II, the desktop and tube monitor, the flat-screen LCD monitor, the laptop, and now the superthin ultrabook. What hasn't changed is its increased usage in the world and our reliance on the basic PC.

The PC may just have to take a new form in our lives, with the lines between television, computing, and communication devices becoming more blurred. As that happens, maybe the PC becomes something totally different.

What could replace the PC?
When Apple comes out with its Apple TV (or whatever the company will call it), what I'll be watching for is a potential PC replacement. Are the days of a dedicated monitor going by the wayside? Will I soon be mounting a 50-inch TV in my office and just connecting a keyboard and mouse to it for my daily writing?

I hope so, but the death of the PC is a long way off. There are just certain capabilities a tablet or a smartphone can't replace, no matter how cool they are.

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Fool contributor Travis Hoium manages an account that owns shares of Intel, Apple, and Microsoft. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings, or follow his CAPS picks at TMFFlushDraw.

The Motley Fool owns shares of Intel, Microsoft, Amazon.com, and Apple. Motley Fool newsletter services have recommended buying shares of Intel, Apple, Amazon.com, and Microsoft and creating bull call spread positions in Apple, Intel, and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


Read/Post Comments (13) | Recommend This Article (4)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On January 18, 2012, at 8:51 PM, Netteligent09 wrote:

    Our current computers are working great. There is no need to upgrade or purchase a new expensive and boring computers.

    Ultra laptops and tablets are the needs. If they are too expensive, nobody wants to buy.

    Linux is great with many mature applications. No need to pay for expensive Microsoft OS, Office, and applications you hardly use.

    Everything we need will be on the cloud computing, less need for computers.

    For gamers, you can get a nice video games for less than $250.

  • Report this Comment On January 18, 2012, at 11:21 PM, SSchlesinger wrote:

    When the microwave first came out people were saying that you wouldn't need an oven anymore. I distinctly recall hearing about people talking about microwaving the turkey at Thanksgiving. And some idiots even suggested homes would be built without stoves.

    I guess we're in the post oven era now, except that every house I've been to has one still. Last year they shipped 400 million PC's. In other words you could give a new computer to every man, woman and child in the United States and still have computers left over! And guess what, this year they'll do that all over again! So, please explain to me how this is a dead market?

    Tablets and cell phones are simply the microwaves of our era. They aren't really replacing anything. They are just another device to own.

  • Report this Comment On January 18, 2012, at 11:55 PM, Klippenstein wrote:

    You are right in pointing out that the PCs death is (again) being greatly exaggerated. This time at CES iPads and Android Tablets that are being credited for its demise. Three years ago it was net books. Where are net books now? Allow me to make a prediction, in three years Android tablets will have gone the way of the net books and Windows 8 will be the tablet and PC of choice (since it is both, a Tablet and PC). Apple will by then be under alot of pressure to integrate its iPad with the Mac. The iPad will be moving toward the 5% worldwide market share the Macintosh enjoys while the PC will live on with its 80%+ market share. As a result, Microsoft stock will be worth twice what it is today. Apple will be lucky to be worth what it is today, likely very much less. I would put money on this.

    All this is as it should be. Smart people will eventually stop paying more for something that gives them less. Continued purchases of Apple's expensive multi-gadget devices (however sexy) will give way to more integrated, more useful lower cost mostly Windows-based alternatives. Smart consumers will continue to enjoy their digital lives but also laugh all the way to the bank. We will call these new devices a Windows PC or Windows PC Tablet.

  • Report this Comment On January 19, 2012, at 12:56 PM, Brent2223 wrote:

    It's the death of the home PC that is happening right now. Smartphones and tablets have more than enough capabilities to handle personal computing requirements (email, online banking, web browsing), cloud computing removes the need to have a PC for physical storage, media intigration with a home entertainment system is already here, what else do I need a PC for at home (other than for niche markets, such as hard core gamers)?

    The PC is still dominating business computing, but all that is necessary is a 'docking station' to get your big monitor, keyboard, and mouse, and some servers in the background to add processing power. And once tablets are broadly accepted on the personal front, business will be forced to get with the times. Look at the iPhone, business does not want to support it, favouring the BB security, but they are being forced to as that's what employees want.

    The smartest thing Apple is doing is pushing their devices to a younger and younger audience. If they grow up using i-devices they'll be even less open to using diferrent technology at work.

  • Report this Comment On January 19, 2012, at 1:27 PM, piranha60565 wrote:

    I disagree Brent, "a docking station, big monitor, keyboard and mouse and servers in the background for processing power" is not the only difference with a tablet and desktop. That is incredibly short sighted and just not true.

    There are a variety of services and features that tablet have a hard time using.

    Tablets/phones have smaller antennas and different wireless security specifications than you standard laptop. The processing power difference is obvious. Cloud computing can take some processing load off of the tablets but only for specific applications that are published on that server.

    IoS is also much more difficult to use when formatting large drives, accessing samba shares and mapping shared drives.

    On top of all of this Microsofts active directory will NOT be replaced by Open directory (because its terrible) and until separate software isn't required to integrate with it, it will never be common place in a business environment

  • Report this Comment On January 19, 2012, at 1:31 PM, piranha60565 wrote:

    Great article BTW, arguments that I have made in the past about the "death of the PC". But even if the PC "dies", Intel should be fine. I am confident in their ability to enter the mobile market and they will always have a place with processors in servers (which only intel can make processors powerful enough for cloud computing right now)

  • Report this Comment On January 19, 2012, at 1:54 PM, talan123 wrote:

    Here is what it comes down to in my humblest of opinions:

    1.) PC's are for creating and finalizing content.

    2.) Tablets are for consuming and capturing content as a person goes.

    There isn't a lot of overlap there. PC's are going to be fine.

  • Report this Comment On January 19, 2012, at 2:30 PM, Klippenstein wrote:

    @talan123

    Question for Talan123 and others: Would you buy a iPad/Android type Tablet for $700 today that also allowed you attach a keyboard and mouse and use it like a standard Mac/PC, if you needed to create content? Or would you insist on keeping the two devices separate?

  • Report this Comment On January 19, 2012, at 2:48 PM, DJDynamicNC wrote:

    @Klippenstein - that's a bold claim re: the iPad but an intriguing analysis.

    I don't know enough about the merits of Windows 8 versus iOS to stake a claim either way but I'm very interested in how it turns out.

    Also adding MSFT to my portfolio. :lol:

  • Report this Comment On January 19, 2012, at 3:10 PM, talan123 wrote:

    @Klippenstein

    No. $700 plus the accessories is just too much to justify replacing my PC/laptop.

    PC's are many magnitude faster at virtually every task you can think of and are going to be for the future. A computer graphics card is reason alone for me.

    Tablets lack the ability for people to sit down and work for hours on end without eyestrain, distractions. Working on a keyboard has a much different output than anything the iPad has come up with. (Yes, I realize that you can keyboards for those things but I would argue that those things are not really keyboards but mini-keyboards.)

    Finally, there is the social aspect of it. Somebody sees me with a Tablet, they are going to question me about it and what I am doing with it. Whereas with the laptop people know that I am working on something.

    Tablets are growing up, quickly, but they are not going to replace the PC because they simply lack our expectations of it.

  • Report this Comment On January 19, 2012, at 4:47 PM, piranha60565 wrote:

    .... and Intel beat estimates, again!

  • Report this Comment On January 19, 2012, at 5:14 PM, EnigmaDude wrote:

    There have to be at least a couple million or so Chinese who don't even own a PC yet!

  • Report this Comment On January 19, 2012, at 5:29 PM, racchole wrote:

    @Klippenstein,

    That was an extremely refreshing remark to read on an AAPL-related post. And while I (a smart consumer) agree with your perspective, your opinion has one gaping flaw. You used the term "smart consumers" which is a fallacy. There may be smart consumers out there, but the majority of consumption is not done "smartly," nor will it ever be. People will continue to spend money on stupid things for as long as people live. Therefore, Mac market-share might increase more than you are guessing.

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