PCs, Smartphones, and the Real Computing Bottlenecks

NPD Group now reports that year-over-year PC unit sales are down 6% for January, with similar declines appearing in prior months. This could have more than something to do with netbook shipments plummeting 34% because, well, netbooks suck. Now we have tablets, which are what netbooks should have been in the first place. Of course, it's not all grim news in the PC space. Mac unit sales are up 20% and Lenovo shows y-o-y growth over 31 percent. But if you're Dell or, God forbid, a local whitebox PC builder, then you're probably sweating buckets in 2011.

Of course, the writing has been on the wall for many years. When notebooks were just passing desktop PCs in unit sales, former Red Hat CEO Bob Young was already commenting to me, "The computers that people are buying now are being used for less and less sophisticated applications." He described eBay and Amazon as the killer apps of our generation, not Microsoft Office. Do you need a desktop or even a notebook PC for these apps? Of course not. You just need a smartphone.

Source: The NPD Group/Evolving Technology Trends: PC Activities on Non-PC Devices

NPD research clearly shows that the "killer apps" of the '90s are now the domain of modern phones. These tasks might be easier on a full-size system, but carriers aren't knocking hundreds of dollars off of new PC sales. In fact, Gartner ranked the devices people intended to buy during 2011 in this order:

1. Smartphone
2. Laptop
3. Desktop PC
4. Mobile handset (non-smartphone)
5. E-reader
6. Tablet

"Continued low retail pricing and widespread adoption of applications like Web browsing, e-mail, Twitter, Facebook, GPS and games will continue to stimulate consumer demand [of smartphones]," said Hugues de la Vergne, principal research analyst at Gartner, in a statement. Smartphone performance for these tasks is now "good enough" for mainstream buyers. Moreover, with speech-to-text capabilities a la Google's speech input, the old argument that phones are terrible for text entry is quickly receding. I can enter text faster by talking to my phone than typing either on-screen or with thumbs, even with the occasional editing to prevent ghastly gaffes.

Many people in the computing industry (especially those in manufacturing) keep telling me that there will always be a need for PCs. These advocates say that applications such as gaming, design, and modeling will keep requiring desktops. I don't buy it. Gaming is about latency and bandwidth while design and modeling are about processing power. Today, these assets still require local power for suitable performance, but all of these factors can be improved enough over time to enable cloud-based application serving. Ultimately, the real bottlenecks will be screen size and input efficiency, not MIPS and throughput, and there's nothing in those two attributes that requires a bulky desktop PC...or even a notebook.