Expect the PC to Dwindle Further in 2013

 | Dec 28, 2012 | 9:00 AM EST  | Comments
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Stock quotes in this article:

aapl

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rimm

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hpq

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intc

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dell

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armh

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msft

One of the themes to come out of 2012 was that the personal computer came into the year as one of the major tech categories, and it went out of the year with a number of questions facing it.

A year ago, no one was talking about the possible death of the PC. Today, you need to consider it.

What has changed in the last 12 months is the continued prevalence of Apple's (AAPL) iPad and the continued decline in growth of all PCs. This, of course, has hurt PC makers such as Hewlett-Packard (HPQ), Dell (DELL) and the Asian manufacturers. It has also been a difficult year for Intel (INTC), which has thus far failed to make the leap to mobile. We have also seen a tepid response, so far at least, for Microsoft's (MSFT) new Windows 8 operating system and its new line of phones and tablets.

Looking ahead to 2013, this "continued death" trend is unlikely to change for those in the PC ecosystem.

The iPad will continue to explode. There will also be growth in Android tablets and Kindles. Even Research In Motion's (RIMM) PlayBook might see a resurgence if many enterprises show a renewed interest in the BlackBerry.

So far, Dell's and Hewlett-Packard's tablets have not registered with the consumer. Their only hope is if consumers show a sudden interest in Windows 8.

Dell and Hewlett also have lots of other internal issues plaguing them beyond the decline of PCs. They have a lot organizational issues facing them which will make it that much more difficult to get a comeback in PCs going.

Intel also appears to be in trouble. It has been trying to break into mobile for 12 years, spending an enormous amount on marketing and internal research and development. Yet it has nothing to show for its efforts. Now it will have a new CEO, and it can possibly spend some of its $100 billion market cap on some acquisitions. But it's hard to get excited about the path it is on, compared with the direction that ARM Holdings (ARMH) is taking.

Microsoft is going to be particularly interesting to watch in 2013. If the Surface tablet, Windows Phone and Windows 8 all fail to make a big impression on consumers, there will inevitably be questions raised by shareholders regarding the leadership of Steve Ballmer. More importantly for Microsoft, if none of these next-generation products take hold, what will be Microsoft's recipe for fixing them? Each of these products has been years in the making. You can't just go back to the labs and whip up a new OS or tablet.

I suspect that Microsoft's response to failures by any or all of these products will be to iterate until they take hold.

However, all the while, we will continue to see Apple and Android take computing share from Microsoft and the old PC industry.

By the end of 2013, the PC industry could be far weaker than it is today.

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