An interesting phenomenon is playing out in the PC industry. To see where it’s going, let’s take a look at the past, particularly in the 1990s, when Apple as a company was regarded as lost. Before Steve Jobs returned, plenty of red ink was being shed, and some suggested Apple would be gone in a few months.
Consider a certain Macworld Expo keynote in 1997, where Steve Jobs, having recently regained control of Apple as iCEO, introduced Microsoft’s Bill Gates on a large screen via a satellite feed. You could feel and hear the boos in the audience. But the event was designed to announce that Microsoft had invested $150 million in Apple, and had agreed to a five-year deal to continue to produce Office for the Mac. Talk about confidence. And, of course, the Mac version of Office is still being produced.
But the most significant remark came from Jobs, who said that the PC wars were over, that Microsoft had won. Maybe he was right in a matter of speaking, but that victory may be a hollow one as time goes on.
In recent years, sales of Macs have increased by larger percentages than those of most PC makers. Nowadays, PC sales remain relatively flat, as even the largest companies are struggling to move product. Where Mac sales were once in the hundreds of thousands each quarter, now they are roughly five million for the same period. Apple is entering the top four and top five positions among PC makers around the world. This is a pretty amazing achievement for a so-called “niche” product, or, as Microsoft Steve Ballmer once suggested, a rounding error.
But when you analyze PC sales, it is becoming more and more obvious that you cannot limit market share figures to traditional desktop and notebook computers. The picture has become a whole lot more complicated, and it all began with a monster that may have been created by Microsoft.
For a number of years, Microsoft touted tablet computers as the next great thing, perhaps believing that if they said it long enough, it might just happen. But their vision of a tablet, essentially a tricked out notebook with a rotating display sensitive to a stylus, was too expensive and never caught on with consumers. Sure, some businesses embraced them, but not in large quantities.
So when the iPad arrived, the skeptics howled that it was nothing more than a glorified and swollen iPad touch. That is until customers embraced them in huge numbers, and higher and higher percentages of big corporations either tested or deployed them. Suddenly the industry took notice, but, unlike those other tablets, they weren’t initially classified as personal computers.
Of course, that takes us back to what a PC is supposed to be, and whether the iPad or any similar mobile device can fulfill all or most of the same functions. It’s not necessarily whether it uses a physical keyboard or not, which is probably the biggest area where the iPad differs from traditional desktops and notebooks. And even then, if you must, you can connect a keyboard to it, so that argument goes out the window.
The other issue is screen size, but don’t forget that, for a number of years, those original Apple PowerBooks had displays that were smaller than the iPad, and even where the sizes more or less aligned, the iPad had more pixels.
Now it is reported that some of the companies that survey PC sales are including tablets too. Certainly, traditional PC makers who have had no luck competing with the iPad are going to freak. But when you combine Apple’s Mac and iPad sales into a single category, which in theory is where they ought to be, something magical happens.
Indeed, projections indicate that, assuming a huge uptake of the expected iPad 3 in 2012, Apple is poised to become the number one PC maker on the planet ahead of HP. The fact that Microsoft is going to deploy Windows 8 on traditional PCs and tablets indicates that, to them at least, they exist in the same category. Microsoft did present tablets as just another type of PC that, to them, was meant to run Microsoft Windows. That Apple chooses to use different operating systems on Macs and iPads shouldn’t change things.
So, yes, if you consider a PC as defined by the standards of the 1990s, I suppose Microsoft’s dominance is not expected to end anytime soon. But as soon as that huge fly in the ointment, in the form of the iPad, comes into play, the situation changes. Apple is a major player, and it doesn’t seem likely that Microsoft’s will alter their vision of what a tablet should be.
But there are numbers and there are numbers, and not all market research firms are quite ready to embrace this new reality. But that situation is destined to change.
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