PC: Days of Future Past

So Hewlett-Packard is getting out of the PC business.

Well really they are splitting the company into HP, the PC and Printer company, and Hewlett-Packard Enterprise, the enterprise and solutions company. In many ways the split is as much an abandonment as anything else. HP is following a number of PC vendors who have either refocused on enterprises (Toshiba), stopped selling in certain markets (Samsung), or left the market altogether (SONY).

For HP it makes sense to split off the flailing PC business. It seems to have been in a spiral ever sense former CEO bought Palm in a quest to jumpstart HP’s mobile ambitions. Ever sense his firing it seems like HP has slowly been plagued by the FUD that has spread with the growth of mobile. What I mean by FUD is the moment stories were being written about the iPad as the harbinger of the end of the PC, PC makers scrambled to get to the tablet promised land.

The emergence of mobile as something that competed with laptops and desktops had hardware makers throwing a lot of different things to the wall to see if they’d stick. Couple this with a PC market that is essentially slowed down to predictable patterns and saturation and you have a field where people got nervous. Now I am not going to get into a blame game, namely because there is no one to blame. The PC market is a commodity market; they all offer the same engine (Windows) and are only bought when needed. And while PC makers have added non-Windows devices to their lineup (Android tablets/devices and Chromebooks) They have move the needle little for most. However there is a silver lining; from all accounts PC sales have improved compared to tablets.

Right now an interesting thing appears to be happening to the PC market: it’s consolidating. While the PC market has shrunk it is also stabilizing. However the market going forward will be different. The PC market unlike tablets or smartphones is both mature and saturated. While there is some growth there is also low margins. With Windows PCs the expectation is consumers can buy them cheap. There is also the fact that many keep their computers until they break or they need replacing. These factors look to be forcing some OEMs to make changes. A number of PC makers can no longer live by the meager margins of the hardware business, or if they can they want the stability that focusing on enterprise provides. It is interesting or example to see Samsung pull back from not just Windows but also Chromebooks in Europe (and anecdotally it seems from stocking them at their mini stores in BestBuy).

So what does all this mean for companies like Microsoft and Google? For Google it probably means little. Android is bigger than Chrome and OEMs like Lenovo and Acer seem not to have issues in selling Chromebooks. I do expect for the Mountain View based company to push Chrome OS as a viable option over Android. I say this because they are adding Android apps onto Chromebooks making the occasional Android based laptop or desktop moot.

With Microsoft I see both a push to gain back hardware maker support and also a continued push into branded hardware. For Microsoft I think hardware will never be the revenue stream software is, but it could be solid revenue nonetheless. In a market where OEMs are scarce and split between itself and Google Microsoft could see hardware as a form of insurance. Hardware can also be used to highlight the companies technological innovations. I think the experience with the Surface (both good and bad) will make them continue to keep their toe in the hardware waters.

For users, especially those that identify as being PC users, the future will mean a smaller set of choices and potentially choices that will be regional. The VAIO brand continues but as a Japan specific one; it’s a potential trend. Beyond that I think we will see a mix of old and new faces going forward.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: