It's a 'PC-Plus,' Rather Than a 'Post-PC,' World, Analysts Say

By Jeff Burt  |  Posted 2013-09-30 Print this article Print

That said, PCs still face their own set of problems, with Microsoft's Windows 8 being among them. Windows 8, with its extreme changes to the interface, the ditching of the Start button and the increased costs that come with touch-enabled systems, has probably hurt the PC market more than it's helped, he said.

In addition, confusion around the OS is abundant. For example, few people understood that they could get Windows 8 systems that weren't touch-enabled, he said. Officials with Microsoft and other tech vendors are expecting Windows 8.1 to clear up much of those problems, including adding the Start button back in.

In addition, some of the new PC form factors still need work before they will be embraced by large numbers of users. For example, Intel's Ultrabook initiative—offering ultra-thin and light notebooks that include such tablet-like features as long battery life and instant-on capabilities—are attractive but are still too pricey, and need to come down to $600 or less, O'Donnell said.

Despite the challenges, tech vendors—while looking to extend their reach into new growth areas—are not abandoning PCs. Hewlett-Packard CEO Meg Whitman has consistently resisted pressure to spin out or sell off the PC and printer businesses a la IBM, insisting that the company—which is now the world's second-largest PC vendor after Lenovo—is "better together," and that PCs give HP necessary scale. In addition, HP is still smarting from the seismic reaction in 2011 to then-CEO Leo Apotheker's announcement that the company would get rid of its PC business, a decision that hastened his exit.

Michael Dell, who is buying his namesake company and taking it private to accelerate its transformation away from being primarily a PC maker to more of an enterprise IT solutions provider, said a private Dell will continue to invest in PCs as well as tablets.

"While Dell's strategy in the PC business has been to maximize gross margins, following the transaction, we expect to focus instead on maximizing revenue and cash flow growth with the goal of improving long-term sales and competitive positioning," the CEO said in a memo to employees in April.

At the Intel Developer Forum 2013 in September, on display among the various Intel-powered tablets and smartphones were new PC designs that company executives believe will drive innovation and sales into the coming year. CEO Brian Krzanich, in his keynote address, said that the "PC is in the process of reinventing itself. There's more innovation going on in the PC than ever before."

Krzanich at the show announced the launch of the low-power Atom Z3000 Bay Trail system-on-a-chip (SoC) family, which in combination with Windows 8.1 will help fuel a spate of new PC forms, he said. The most prominent of these, according to Krzanich, are the upcoming two-in-ones, convertible systems that can be used as either a traditional notebook or as a tablet. The CEO said that by year's end, there will be 60 new convertibles on the market and that number will jump to 75 by early 2014.



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