So, iPad will change the PC industry? Yeah, right

It's fraking Friday and to celebrate Gartner analysts are predicting Apple's iPad is going to change everything you know about the PC market. Everything. Betanews readers, will you let such prognostications go unanswered?

"Apple's iPad is just one of many new devices coming to market that will change the entire PC ecosystem and overlap it with the mobile phone industry," Ranjit Atwal, Principal Gartner analyst, said in a statement. "This will create significantly more opportunities for PC vendors as well as significantly more threats." Threats to whom or to what? The traditional PC.

"Apple will begin taking orders for iPad on March 12, the company announced today. Buyers can pick up their purchases on April 3 at a local Apple Store as alternative option to shipping. I'm already on record giving "12 reasons why I won't buy an iPad." I haven't found a reason yet. Have you?

Gartner predicted that PC shipments would rise 19.7 percent  in 2010 to 366.1 million units from 305.8 million units in 2009. Worldwide PC spending is expected to rise 12.2 percent year over year to $245 billion. The big growth will be in mobile PCs, which accounted for 55 percent of PC shipments last year. Gartner predicts 70 percent by 2012.

"The PC industry will be overwhelmingly driven by mobile PCs, thanks to strong home growth in both emerging and mature markets," George Shiffler, Gartner research director, said in a statement."We expect mobile PCs to drive 90 percent of PC growth over the next three years."

Once again, netbooks -- or what Gartner calls mini-notebooks greatly contributed to sales growth and boost in the mobile-to-desktop ratio. However, netbooks "contribution is expected to decline noticeably afterward, as they face growing competition from new ultra-low-voltage (ULV) ultraportables and next-generation tablets. Desk-based PC shipment growth will be minimal and limited to emerging markets." What's going to suck the wind from netbooks' sails: The iPad and other tablets. Gartner expects 10.5 million unit shipments this year, with iPad presumably leading the way.

In the past, Gartner showed much less enthusiasm for the Tablet PC, a concept Microsoft tried to jumpstart in the early "Noughties." In a November 2002 statement, Gartner analyst Leslie Fiering asserted: "Only the bravest will implement Tablet PCs widely toward the end of 2003." It's true that the Tablet PC never found a mass market.

Gartner is making bold predictions about iPad -- and also other smaller form factor-connected devices -- in part because of cloud computing. "Vendors can no longer afford to just think in terms of traditional PC form factors or architectures," Atwal asserted. "With the rise of Web-delivered applications, many users no longer need a traditional PC running a resident general-purpose operating system and fast x86 CPU to satisfy their computing needs."

The PC's Cloudy Future

Yesterday, Microsoft CEO Steve Ballmer asserted he was betting the company on cloud services. My question: How many times is some Microsoft senior executive going to make a "betting the company" claim before the bet pays off. I've heard that assertion many times before. Haven't you?

Still, Ballmer's heart is in the right place -- the cloud. Microsoft should embrace the cloud. About three years ago, I started warning about the platform transition underway. The cloud (and mobile device) is shifting computing and informational relevance away from the PC much as the PC shifted relevance away from the mainframe in the 1980s and 1990s. I explained in February 2007 post "Microsoft Seeks More Mobile Relevance:

IBM had a huge monopoly in mainframe computers, which only large businesses could afford. The size and cost of mainframes greatly constrained informational utility; people consumed information from terminals tethered to the big computers. When the PC came along, IBM embraced it, seeing no direct threat to its computing dominance.

However, Microsoft and its IBM-PC clone partners did compete with mainframes. The PC extended informational and computing utility to more customers, for a fraction of mainframe costs. IBM's mainframe monopoly continued, but its relevance changed as the PC economy exploded. IBM most certainly continued and it remains a computing and services giant even today. But the PC also changed IBM's business and the relevance of the mainframe.

The Web platform promises even greater informational and computing freedom: Access anytime, anywhere, on anything. The broader threat is really the Internet, which Microsoft tried to push back in the late 1990s during the browser wars, when Internet Explorer was integrated with Windows. The Internet offered huge informational utility, with no Windows required.

A decade later, Microsoft grapples with a renewed Internet threat, but fiercer than before. The success of Google search has increased informational utility; there are more informational clients (such as the cell phone); and more developers are developing for the Web platform. The Internet remains Microsoft's biggest informational threat and, at the same time, opportunity. Microsoft has pushed back by doing what it does well: code client software, which can help maintain or pull back informational relevance to the desktop. Web platform companies like Google seek to pull relevance to the browser and the Web.

I'm a firm believer in the mobile-to-cloud applications stack displacing the Office-Windows-Windows Server applications stack. That's one reason why yesterday I asked: "Will the smartphone replace the PC in three years?" Sure I can see mobile PCs and smartphones make huge gains, but iPad and other tablets? I still contend that there will ultimately be too much functional overlap between iPad (and similar devices) with smartphones below and laptops above -- a problem that helped doom earlier tablet PCs. That said, there is an undeniable shift to mobile computers, whether laptops or smartphones. The PC is by no means dead, but how people use it (e.g., more cloud applications) already is fast changing.

"Connected" is the key word of focus. Gartner's predictions assume there will be overlap between tablet PCs and handsets -- meaning they have 3G radios and presumably would be available subsidized by telcos. Subsidies already are the major driver of connected-netbook sales in some geographies, particularly Europe. Will the prevailing winds favor iPad and other tablets or smaller portable PCs?

For opinionated Betanews readers there are two main questions: Will iPad lead a tablet revolution that will change the PC as we know it? Will mobile devices -- smartphones included -- rapidly displace desktop PCs, essentially making them irrelevant within two or even three years? Please answer these questions -- or anything else from this post -- in comments.

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