Photo: BI Intelligence
It’s been a one-two punch for the iconic PC companies: Dell shares crashed after it forecast second-quarter estimates that fell short of Wall Street estimates, and even though HP reported stronger reveues and profits than anticipated, it is announcing layoffs of 27,000 people. What’s even more striking is that both of these companies have started defining themselves as something other than a PC company. Dell has said that it will emphasise its enterprise services business and HP is getting into the enterprise software business with its Autonomy acquisition.
This is probably mostly why HP’s stock rose on the layoffs announcement, more than its quarterly results: it is signaling that it is moving away from the PC.
It’s not just that the PC era is over. It’s that no one thinks the PC era is not over.
The answer, of course, is in the chart above, which is our estimate of global internet device sales.
Steve Jobs was mocked at first for saying that the smartphone and the tablet heralded a “post-PC era”. But it is happening, and it is happening faster than any of us thought.
This has a broad range of consequences:
- Apple’s opportunity is just massive. It has a positive developer network effect in smartphones. It is the only company that can make tablets people want (with Amazon, see below).
- Microsoft is in a tough spot. We’re not saying it’s toast, yet, because we believe there may be room for a strong number 3 in mobile, and Windows 8 is embracing the right strategy of focusing on tablets and providing a great touch experience, but it will still require heroic effort just to stay relevant.
- Amazon’s Kindle ecosystem is going to pay off hugely. Right now, Amazon is the only winner in the tablet game alongside Apple. If Amazon grabs a significant slice of the future of computing and uses it to sell commerce, media, services and adds, that is an enormous business. (See our Kindle economics primer here.)
- Google’s widely ridiculed Motorola buy might actually turn out to be a smart bet. Tablets are such a hugely important opportunity, and Android is so far behind, that it just might be worth it to strap a dead elephant to its back, alienate its partners, and so on, just to be able to play there.
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