It wasn’t that many years ago that the PC was the powerhouse computing device — for both the general consumer with simple Internet browsing and word processing to do, and for enterprise customers who needed more powerful tools alike. But as smartphones grow more powerful, and ever more popular, the PC doesn’t sell nearly as well, or seem as exciting a device, as it once did.
Nick Wingfield reports for the New York Times that PC sales have been declining for so long — 14 consecutive quarters — that it’s getting harder and harder to remember a time when the PC ruled the tech world. The slump explains why many leading PC manufacturers are struggling to remake themselves in a world that’s dominated by smartphones operated with touchscreens and capable of tasks that required a PC, mouse, and keyboard not that long ago.
HP is splitting into two separate entities. Lenovo is branching out into smartphones with its acquisition of Motorola Mobility. Dell is buying data storage company EMC in order to diversify its business. And Microsoft is beginning to compete with hardware partners like Dell and HP to make its own computers, beginning with the hybrid Surface tablet and now the new Surface Book laptop.
Wingfield reports that despite all of the uncertainty, the industry seems optimistic — surprisingly so — about the future. Frank Azor, executive director and general manager of Dell’s XPS line of computers, told the Times, “Initiatives like Surface and Surface Book have helped the industry wake up and say, ‘We’ve got to make the industry cool and sexy again.'”
The reason why Microsoft got into the PC business, with the launch of the original Surface hybrid three years ago, wasn’t to put hardware companies out of business, but to illustrate the capabilities of its software and to inspire PC makers to be more innovative. The logic mirrors Google’s Nexus program in that respect, and the strategy seems to be working. The event where Microsoft introduced the Surface Book generated the kind of interest that’s usually reserved for Apple announcements.
Other companies are testing the waters of devices that blur the line between tablet and PC, in either form or function, or both. Apple recently introduced the large iPad Pro with a stylus (in a move that many said imitated Microsoft and the strategy behind the Surface tablet). And Dell, which still sells millions of PCs, announced a number of new machines that run Windows 10, one of them similar to Microsoft’s Surface Book in that it combines the keyboard of a traditional laptop with a touchscreen that can be detached and used as a tablet.
Rahul Sood, a former Microsoft executive who ran a manufacturer of gaming PCs which he sold to HP, now the chief executive of a games startup in Seattle, told the Times that PC companies seemed to be blind to the threats in the market, especially those posed by Apple. Microsoft, in Sood’s assessment, has helped to shake them out of it. “They needed to reignite the PC market,” said Sood. “The only company in the world who can do that is Microsoft.”
Jan Dawson, the chief analyst at Jackdaw Research, recently wrote that PC companies “have only themselves to blame if Microsoft, which has zero experience in making laptops, is able to produce a more compelling computer” than hardware companies with far more experience in creating and selling PCs.
Microsoft’s Surface business has climbed to $3.6 billion in annual sales, up from zero three years ago. But many PC manufacturers haven’t been able to get consumers to spend money on PCs like they used to, since most are holding on to their machines longer and are relying on mobile devices for more of their daily computing tasks. While hardware partners initially complained in private about Microsoft’s Surface business, HP and Dell have since agreed to sell the Surface Pro line to corporate customers through their sales forces. Microsoft’s PC business is still relatively small, but the money it’s spent promoting the devices has also raised the profile of other manufacturers’ Windows PCs.
As for the question of whether the PC can become cool again, the movement toward hybrid, convertible devices that make connectivity and powerful capability flexible and mobile seems a promising turn. We’ll just have to see whether the new devices by Microsoft and other hardware makers can like up to that promise.