The Last March of the PC

With the holiday shopping season upon us, in earnest, my attention is drawn to the hordes of <$400 laptops on the market. A couple years ago, within Windows, we were cringing at the onslaught of Chromebooks, to which we had no better answer than the continued race of the behemoth desktop-replacement laptops to match at least on price. Think driving the price of a last generation Toshiba C55 down to $249.

Two years on, the Windows value-entry ecosystem is in a much more competitive place. In large part, this has been triggered by licensing changes, designed to stem share loss at the low-end, not dissimilar in concept to the Windows “Starter Edition” driving Linux-based netbooks from the market. Well, the differences are myriad; Windows with Bing is not a limited OS, like Starter was, and performance, even at the low end of the laptop market, is finally sufficient, for typical consumer use.

But, I wonder what this is accomplishing. We’re all just fighting for an ever shrinking pie that is the PC market – and I draw the circle around what constitutes the “PC” market liberally, including OS X and Chrome OS. PC penetration in most regions of the world has peaked. And because even the lowest options on the PC totem pole are increasingly “good enough” for typical use, the upgrade cycle has lengthened. There are literally over half a billion PCs, in use, over 4 years old. It’s not clear there are any further “killer apps” in the PC sphere that will drive a significant portion to upgrade. Likely not, with the technology ecosystem’s focus elsewhere.

So, yes, Windows will continue to drive new features into the PC, to limit the decline of the market. Windows Hello is magical (similarly, ask iPhone users if they’re willing to forego their fingerprint readers), but it’s still making its way to mass market. Look at the shelves this holiday, and you’ll find Windows Hello is still few and far between, mostly on >$700 devices. It will come down, but it’s not a Hail Mary that rejuvenates the entire market. That said, Hello and other features are part of a holding pattern, while “the next thing” is cultivated (cloud? services? “IoT”?).

In the meantime, enjoy what is likely to be a last generational hurrah for PC innovation. We will drive it, because we need it to support the privilege of being able to invest elsewhere. Budget PCs will get much better and a more definitive premium tranche, carved out by Apple, and increasingly joined by Surface, will be sustained.

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