PC sales meltdown on iPad 2's 'Post-PC' promise

By Jonny Evans

"It takes five seconds to realize that it's time to move, it's time to get down with it! Brothers, it's time to testify and I want to know, are you ready to testify? Are you ready?"
MC 5, Ramblin' Rose

[ABOVE: Apple's new iPad cover video]

No matter how we humans try to over-complicate it, it takes just a few seconds to make a decision and a lifetime to explain it. iPad 2 is here and this is why Gartner this morning slashed its market growth forecast for the PC industry, on strength of the Apple tablet and its delivery of what I'm calling the "Post PC' Armageddon.

"We now believe that consumers are not only likely to forgo additional mobile PC buys, but to extend the lifetimes of the mobile PCs they retain as they adopt media tablets and other mobile PC alternatives as their primary mobile device," wrote Gartner research director, George Shiffler.

He was explaining why the analyst firm now expects PC sales this year to climb by just 10.5 percent in contrast to 2010, not the 15.9 percent the firm had originally anticipated.

-- That's one third less than anticipated growth in an industry in which Apple's Mac sales increases have exceeded industry averages for 19 consecutive quarters.

-- December 2010 and IDC told us Mac sales grew 17.1 percent in the global home market, while the broader market posted a decline of .6 percent. In business, Mac sales climbed 65.4 percent compared to the market growth rate of 9.7 percent. And in government, they grew 549.5 percent.

iPad shows Xoom the zoom-zoom

Meanwhile, the iPad holds the lion's share of the tablet market, and the iPad 2 delivering a platform, price and specifications-based bang for the buck no one can beat, least of all Xoom (Xoom? C'mon -- let's move on from that silly conversation...).

-- The iPhone is emerging as the most profitable smartphone brand even as Apple gears up for an extension of its offering with a small-sized Apple Communicator gadget for later this year....

This is Apple's growth story. It isn't really a story -- it's a reality, a paradigm shift happening right before our eyes, a seismic shift in consumer electronics toward a post-PC age.

[This story is from Computerworld's Apple Holic blog. Follow on Twitter or subscribe via RSS to make sure you don't miss a beat.]

Add iPad sales to Mac sales and Apple is already in third place in terms of global marketshare and is already the biggest PC maker in the US, as DisplaySearch and CanalSys now agree.

Now, we know Apple's biggest-selling Macs are its MacBook Pros. These are popular, in no small part because you can use the high-end models as highly effective professional devices for hardcore uses including video editing and music production. These are natural markets for powerful PCs and powerful processors. And strategic products, including Final Cut Studio (TIP: set for upgrade next month at NAB) and Logic Studio. 

PCs, Jim, but not as we know it...

But what about those other sectors where PCs (or Macs) are widely used? Do you really need all the processor power these provide in order to take a hotel booking, check a patient's records or take inventory? Or to access share data for day trading?

All those PCs used primarily as writing or data access devices are going to be casualties in the post-PC world. (That's why we need strong and enforceable recycling policies now, not later).

This isn't happening in the short term, but the writing's on the wall. Apple knew this was coming. It planned for this inevitable evolution many years ago when it began iPhone/iPad development, creating new Apple platforms for the post-PC era.

"We once thought that mobile PC growth would continue to be sustained by consumers buying second and third mobile PCs as personal devices," said Gartner's Shiffler.

Gartner doesn't think this anymore. Consumers -- and enterprise users -- have a choice. Whether they choose a smartphone, an iPad, or some more expensive, less well-featured tablet is a moot point. Like the music industry when file-sharing impacted its business, for the PC business the genie is out the bottle.

Even in the enterprise?

iShip enterprise

"Even in the professional market, media tablets are being considered as PC substitutes, likely at least delaying some PC replacements," said Raphael Vasquez, senior research analyst at Gartner.

Way back in 1984 Apple made a play at saying the Lisa was a portable system merely because a fairly well-built individual could pick it up and move it across the room. That's change for you. Things change. We're watching them changing. There's going to be some pain in the transition. This is how it rolls.

"All-day untethered computing has yet to materialize, and that has exposed the "mobile" PC as merely a transportable PC at best," write Gartner.

"Ah," but critics argue, "Ah, but you still need a PC to sync your devices, don't you?"

You do. At present. But it's a given tablets are connected devices and only questions of security need to be resolved before a user's entire digital existence can conceivably be held in the cloud. So how long will it be until we see universal, seamless, always-updating device sync using wireless connectivity up, up and away and into the cloud? At the current rate of evolution, this could be as little as months.

We'll still need PCs. We might have one at home. Depending on what we do, we might use one at work. How many of really need the PC at work? There's already a chunk of enterprise class tasks which could be done equally as well on a tablet.

[ABOVE: Apple's tear-jerking iPad video]

Things will only get better

As Apple develops the tablet market, we'll see the power, speed and capabilities of such devices grow, making them suitable PC replacements for even more markets.

And with automatic wireless cloud-based back-up, no enterprise need lose any of its valuable data ever again.


"Driven by the soaring sales of products including the iPad and the iPhone 4, Apple Inc.’s shipments of products based on its A4 microprocessor reached nearly 50 million units in 2010 from virtually zero sales in 2009, IHS iSuppli research indicates.

"In an indication of how successful the microprocessor has been, Apple in 2010 shipped nearly four times as many units of A4-based products as did of X86-based PCs."

The same will transpire with the A5. We'll see this chip hit the iPhone 5 in a few weeks time. "What it would bring to smartphones is increased [processing power] for computationally intensive applications," said Nathan Brookwood, principal analyst at Insight 64.

"In the new design paradigm of smartphones and tablets, computing efficiency trumps raw computing power," said Wayne Lam, senior analyst at iSuppli IHS. "Designs like the iPad demand highly integrated microprocessors that emphasize graphics performance, lower power consumption and small space usage."

Get with the program

There's no sense ignoring the momentum. There's even less sense resisting it. Chris Davies at D-link this morning took time to say:

"As devices such as smartphones and tablets take over from laptops and portable PCs in the hands of the population, so organizations need to brace themselves to allow these devices in. It seems that the consumerization of IT is now an unstoppable juggernaut so rather than attempting to ban personal devices, whether a home laptop or an iPad, organizations need to investigate exactly how to let them safely on board."

This is what's happening.

With this in mind, no surprise then that Apple [AAPL] shares rose 1.5% to $357.25 this morning. This is the post-PC age. There's no sense denying it. Now we need to figure out what to do with it. What do we need? HOw can we build it? What do we want and what do we dream? This isn't a challenge. This is an opportunity.

Are you part of the problem, or the solution? It will take you seconds to decide, and a lifetime to explain it. Where do you stand?

Please do debate this in comments below, and I'd be most pleased if you chose to follow me on Twitter so I could let you know when new reports get published here first on Computerworld.  

Signing off, here's something vaguely appropriate from The Doors. Because I like them.

Copyright © 2011 IDG Communications, Inc.

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