Michael Dell: PC Growth Strong in 'Post-PC Era'

The Dell CEO is pushing back at recent comments by Apple CEO Tim Cook that, with smartphones and tablets, there no longer is a reason to buy a PC.

Michael Dell

Michael Dell is having none of this "post-PC" talk.

The Dell founder and CEO, who began making PCs in the 1980s in his university dorm room, has been a champion of the form factor for decades—and has become a billionaire thanks to it—even over the past several years as the number of PC shipments worldwide has declined. PCs still account for more than half of Dell's revenues, and he and other company executives have said they are a cornerstone of the vendor's efforts to become a top-tier IT enterprise solutions and services vendor. They've also been critical about Hewlett-Packard's decision to split in two, a move that separated that company's enterprise IT and PC businesses.

So when Apple CEO Tim Cook this week took a swipe at PCs as he talked about his company's new iPad Pro tablet, Michael Dell pushed back quickly. Sure, the market is changing, but there are a lot of PCs being sold out there and there's a great opportunity to sell even more, he said.

"The post-PC era has been great for the PC," Michael Dell told the London-based Telegraph newspaper. "When the post-PC era started, there were about 180 million PCs being sold a year and now it's up to over 300 million, so I like the post-PC era."

Cook's remarks echoed those made by Apple founder and then-CEO Steve Jobs, who in 2010 declared the arrival of the "post-PC era."

"I think if you're looking at a PC, why would you buy a PC anymore?" Cook asked during an interview with the Telegraph. "No really, why would you buy one? Yes, the iPad Pro is a replacement for a notebook or a desktop for many, many people. They will start using it and conclude they no longer need to use anything else, other than their phones."

His comments came as Apple rolls out the iPad Pro, a larger tablet (12.9 inches) that comes with a keyboard and stylus pen. Tablet sales also have been falling in recent quarters, and Michael Dell and other PC proponents say that while tablets are good for Web surfing and content consumption, real work is best done on PCs, complete with keyboards, larger screens and robust support for business applications.

Tablets are being squeezed from below by smartphones with larger screens and above by more mobile, powerful and affordable PCs. Still, the PC market continues to struggle. In the third quarter, IDC and Gartner analysts said shipments declined between 7.7 percent and 10.8 percent from the same period in 2014.

Michael Dell admitted that the PC space is in transition and has more competition from smartphones, tablets, game consoles, smart TVs and other devices, but there are myriad reasons for optimism. A key one is that there are about 500 million PCs in use today that are four to five years old, and the new systems that are hitting the market now and into 2016—running Microsoft's featured-laden Windows 10 and powered by Intel's new "Skylake" Core chips—offer significant power savings and performance improvements, and cost as little as $500 to $700.

In addition, they are coming in a multitude of form factors, such as two-in-ones and convertibles, which can be used as either a traditional PC or a tablet. Dell and the other top PC makers—Lenovo and HP Inc.—as well as Intel are working together on the "PC Does What?" ad campaign to educate users about the capabilities of the new systems.

Still, IT industry analysts have said it will be later in 2016 and into 2017 before the PC market really starts feeling the positive impacts from Windows 10 and the Skylake chips. Until then, PC makers will have to navigate their businesses through the rough waters.

In that scenario, Michael Dell said he likes his company's chances. He said Dell has gained share in the PC market for 11 consecutive quarters and that the company is primed to take advantage of what he expects will be an active refresh cycle as users replace their older systems with newer ones.

"As we create new beautiful, thin, powerful PCs that are better than the thing you bought five years ago, people will replace the old ones, and we are getting more and more share of that opportunity each quarter that goes by," he said.