IT IS no secret that sales of laptop and desktop computers are in terminal decline. Apple’s iPads, along with various Android tablets, are eating their lunch. Now, it seems, tablets want their supper, too. Announcements on October 22nd of a raft of professional-grade tablets—from Apple, Microsoft and Nokia—show how determined their makers now are to address the needs of business users, as well as mainstream consumers.
This is further proof, were it needed, that the “consumerisation of IT” that got under way several years ago—with tablets and other consumer devices, designed originally for individuals, invading the office and taking over much of the work done by computers—is happening even faster than anticipated (see “Beyond the PC”, October 8th 2011).
In the race to supply tablets to business, Microsoft and its partner Nokia (whose phones and devices are about to become part of Microsoft) have the inside track. Their tablets, along with those from a handful of other suppliers, run Microsoft Office and various Windows-based applications. That is a huge advantage in business. In offices around the world, Microsoft Word is the de facto standard word-processor; Microsoft Excel the standard spreadsheet; and Microsoft Outlook the standard messaging, scheduling and contact software. While a version of Microsoft Office exists for Macintosh computers, there is no native version for iPads.
Even so, Apple is not to be discounted. Its latest tablets—a refreshed iPad Mini, starting at $399, along with an even slicker bigger brother, the iPad Air, costing $499 and up—have an advantage rivals cannot touch: their instant brand recognition and popularity among consumers everywhere. Though cheaper Android devices have grabbed much of the market, iPads are still the tablets of choice for one out of three buyers. The iPad Mini, in particular, remains the most popular tablet on the planet.
Nowadays that counts for a lot in enterprises. Why so? Because IT managers no longer wield quite so much authority over what computing equipment companies install for their employees. Things began to change several years ago. That was when firms started allowing staff to bring their own smartphones and tablets to work, and to connect them to the company’s computer network.
Since then, the BYOD (bring you own device) phenomenon has gathered pace, as tablets have become cheaper, more secure, and have proved themselves capable of doing real work. That has given iPads a better chance to go head-to-head with the various Windows tablets that are making inroads in the enterprise world.
To improve its chances further, Apple is expected to introduce an enterprise-class iPad in the not too distant future—if the way it relabelled the larger of its two tablets the “iPad Air” is anything to go by. Assuming Apple adheres to the same naming convention it uses for its laptops, it has left itself room to add a beefier and more expensive “iPad Pro” to its tablet lineup. Presumably, this would come with a keyboard-cover, like Microsoft’s Surface Pro tablets. Even with touch-screens, tablets still need keyboards to do serious office work.
Why this scramble by tablet-makers to conquer the office? As the consumer market gets crowded, the enterprise sector is the last place where profit margins remain reasonably robust. Apple is being forced to abandon the lower reaches of the consumer business, as cheap Android tablets grab the bulk of sales and erode profit margins all round. Worse, some tablet upstarts are not playing by the rules.
Take online retailer Amazon. Its well-received Kindle Fire tablets start at $139—probably less than they cost to make. Amazon is not interested in turning a profit on Kindle hardware. Its profit comes instead from making it easy for Kindle customers to buy yet more physical goods from Amazon.com, while also downloading lots of feature films, music tracks, video games, books, magazines, and anything else that can be displayed on a Kindle tablet or e-reader screen.
Much the same goes for search giant Google. It, too, makes next to nothing on the Nexus range of smartphones and tablets it supplies. Google’s motive is simply to get mobile devices into the hands of as many users as possible—to increase the amount of mobile searching done on the internet. That allows Google to sell yet more advertising to go alongside the search results prompted by users’ queries. That, after all, was the reason for developing the Android mobile operating system in the first place and why Google gives it away free to phone- and tablet-makers everywhere.
As the consumerisation trend continues, the computer industry is being cratered by the onslaught of tablets. At work, people are now using them to do even more of the jobs previously done on laptops or desktop machines. At home, they are using tablets as a second screen, not only to do their e-mail and other light computing tasks, but also to play video games, and watch films and television shows streamed from the web. As a result, owners feel no compulsion to replace their aging PCs. These are usually considered good enough to do the few remaining chores where iPads and other tablets are inadequate.
The “good enough” factor has been another nail in the industry’s coffin. Ever since Windows 7 came along four years ago, there has been little reason to upgrade to a later PC. Windows 7, famed for getting more out of a computer’s underlying hardware than any other version of Windows, has extended the life of many an elderly PC. Meanwhile, thanks to better quality control, components inside computers no longer fail as frequently as they used to do.
Coincidentally, processors have ceased getting faster. Chip design reached a point several years ago where packing any more transistors onto a sliver of silicon made the processor run too hot and become unstable, as quantum effects began to dominate. For most computer tasks, there were then few gains to be had from upgrading to multi-core architectures.
It is hardly surprising that sales of personal computers, once the beneficiary of double-digit growth, are now collapsing at double-digit rates. This year, shipments of laptops and desktop computers are expected to be little more than 300m world-wide—down over 11% from last year.
Meanwhile, 184m tablets of various shapes and sizes are likely to be shipped globally—an increase of 53% over last year. At that pace, tablets will outstrip computers within two years, reckons Gartner, a technology consultancy based in Stamford, Connecticut.
Tablets have taken off spectacularly simply because, compared with computers, they are good enough and easy to use—a result of being conceived primarily as consumer products for individuals, rather than as professional tools for business. Switch on a tablet and—like a toaster or television set—it simply works, immediately. Turn on a computer and wait a couple of minutes for it to load a bloated operating system, perform some ritual diagnostics, and fire up a stack of background processes before being ready to start work.
The difference highlights the clash of computing cultures that is now playing out in offices everywhere. And, no question, the consumer-focused tablet-makers have the upper hand. Much of the innovation in IT is now being driven, at one end of the scale, by makers of mobile devices with consumers in mind. At the other end are a handful of firms that have ceased making PCs or writing software for them, to focus instead on building and enabling the commodity servers that power the cloud.
In the coming post-PC era, all the smart functionality needed to do things will reside either in some consumer device at the user’s fingertips, or in the cloud at the user’s instant beck and call. In between, where laptops and desktops once reigned, will be a void. In the process, the original-equipment makers who grew up and grew old supplying PCs to offices and homes will become irrelevant. Their business models—devised for a different type of customer and a different way of doing things—rendered obsolete by a different age.
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