In the early 1980s, the then new desktop computers (“personal computers”) were seen by the makers of the minicomputers as toys. These “toys” became more and powerful with every passing year and finally signalled the end of the reign of the minicomputers. In today’s era, the handhelds (Personal Digital Assistants or PDAs as they are called) are much like toys compared to the PCs. And, more interestingly, they actually are “personal”. The pace of innovation in handheld computers is packing in more power and more features. Wireless networks are ensuring that they are always connected and ready to receive data. Integration of cellphone circuitry makes some of them able to work as smart phones.
In contrast, PCs, with an installed base of over 500 million, have become boring. The innovations have slowed even though the Wintel (Windows+Intel) combine keeps up the pace of new products. We have Pentium 4 and Windows XP being released, hoping to boost slowing sales. But for the customer, there is no longer the urge to go and upgrade to the newest model. Penetrations in countries like the US have already reached near-saturation levels. In countries like India, where the growth rates are still good, cost continues to be a major consideration. The only market where PC growth is powering ahead is China. The industry which for two decades has captured our imagination unlike anything else is waiting for the next big thing.
Walter Mossberg’s comments in the Wall Street Journal (December 28, 2000) ring true:
The PC, which has carried the digital revolution for 24 years, has matured into something boring — a costly commodity already possessed by most of the households in the U.S. that can afford one. And while it is being replaced, or complemented, by a new wave of cheaper and friendlier digital appliances, those devices still are in the development stage, so they can’t take up the slack caused by the PC slump.
In other words, the digital world is in a transition, and there’s no way to tell how long it’ll last. There’s a strong future on the other end of that transition, but it will be a bumpy ride getting there.
The PC has peaked as the sole device capable of doing digital things. It will gradually get repositioned as a tool mainly used by content creators, programmers and power users.
For everybody else, the next decade will bring an array of simpler digital devices — wireless and wired, handheld and deskbound — to take over many popular functions now performed by PCs.