Diversity in IT

Recently, several estimates of lower PC production have been published. The latest was by Mark Moskowitz of JP Morgan. He is predicting tiny growth in 2011 over 2010 shipments. A blog post by Ray Tieman, PCs, Tablets: JP Morgan Cuts Estimates, Again reports,
“On the PC side, Moskowitz now expects 360.75 million units to ship this year, growth of 2.8% versus 2010, down from a prior estimate of 375.3 million units, which would have been growth of 7%. For 2012, he also cut his number, to 397 million units, or 10% unit growth, down from a prior 418.5 million units, which would have been 11.5% growth.

Consumer PC purchases continue to be weak, he writes, and in fact, although he thinks consumer PC units will decline 0.2% this year, that drop could actually be worse, he thinks. The problem is that smartphones and tablets are delaying consumer purchases:

We think that the useful lives of PCs are lengthening to 5-6 years versus 4-5 years historically. Alongside the increasing effects of smartphones and tablets deferring PC purchases, we think that the macro and useful life challenges set the stage for a tough 2011 in PCs on the consumer front.”

If one adds to 360million “PCs” the expected 50 million tablets and 472 million smart phones, the picture is not bleak but warm and fuzzy. This situation means the monopoly is stalled, at an inflection point, and has nowhere to go but down. The future for Linux in all its forms and ARM in PCs of all kinds seems very bright. Android/Linux is not taking 100% of tablets, smart phones or PCs but it will have a healthy share in a diverse market, something we have not seen thanks to exclusive dealing by the monopoly for more than a decade. The world is not waiting for Intel to reduce power consumption nor M$ to release “8”. IT is finally getting true diversity in hardware and software plaforms, something long overdue.

Moskowitz and others are predicting “PCs” to grow about 10% in shipments next year but there is no basis for that. It’s wishful thinking that things will return to normal. Normal used to be people buying another PC every three years. Normal is people wanting small cheap computers and keeping old machines until they die, something people can expect using Linux and ARM. By the time Wintel gets into the mobile market they will be playing catch-up. More personal computing devices, including smart thingies, will ship with Linux aboard than that other OS. More personal computing devices will ship with ARM than x86/amd64. 2011 is going to be a great year.

About Robert Pogson

I am a retired teacher in Canada. I taught in the subject areas where I have worked for almost forty years: maths, physics, chemistry and computers. I love hunting, fishing, picking berries and mushrooms, too.
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11 Responses to Diversity in IT

  1. Contrarian says:

    “Not any time soon.”

    I do not see why not. AutoDesk is unlikely to see any value in migrating CAD stuff to these peanut whistles, but if the ARM device is a replacement for an x86 notebook as you suggest, then Intuit and Adobe are likely to offer compatible products to x86 consumer versions on ARM. It’s not that hard to do, after all. If you can easily re-complile a FOSS program to run on ARM, you can do the same with a proprietary program.

  2. Are all their “partners”? Intuit? Adobe? AutoDesk? Not any time soon. M$ cannot supply all the apps people want, suddenly.

  3. Contrarian says:

    “they will not be able to keep ARM out of desktops and notebooks.”

    That is certainly the case, but why would you think that there will be any different outcome in terms of Windows being the dominant OS on these ARM computers just as it became dominant on netbooks a couple of years ago? Nothing has changed unless you want to believe that Microsoft cannot muster the effort needed to program the ARM processor effectively. It seems to me that Microsoft has been using ARM for longer than anyone else and is as capable as anyone to make the transition.

  4. Consumers are buying tablets instead of notebooks. That’s a huge change happening now. I cannot see that change being kept out of business.

    M$’s bottom line still seems healthy but lack of growth will be deadly. Within a year everyone will know that a tablet or notebook running Android or GNU/Linux is a rather trouble-free money-saving beast compared to a desktop or notebook running that other OS. Even the bean counters and PHBs will see that. Even the rise in fuel prices encourage working at home, saving power and travelling light.

  5. PC OEMs have tiny margins. They fear losing money per PC if M$ disappears. With smart thingies there is a handsome margin, sometimes 50% or so. That will slide as early adopters get what they want but the cost of the material in even a $500 smart phone is only about $200 and there is no software licence to buy.

    “The so-called Wintel era is over with no CPU or OS vendors to be able to dominate the PC, tablet PC or handset markets as they did before, according to Asustek chairman Jonney Shih. The breakup of the Wintel alliance offers a brand new opportunity for system vendors to thrive again in the IT market, Shih said.”

    see Wintel era is over, says Asustek chairman

  6. Contrarian says:

    I did not know that, so thanks for the information. OTOH, I think that it is still the case where there is nowhere even close to a $16B OS market in the cell phone arena, even throwing in tablets. The PC market worldwide is unique and is still monopolized by Microsoft Windows. Microsoft will be damaged as that market starts to decline, but no one else will ever gain much participation. Also, that market has not actually started to decline, in spite of the rise of smart phones and tablets.

  7. eebrah says:


    Like apparently most commenters on this site, you assume every market in the world follows the American one. In north America the provider may subsidise the cost of the device but have you checked out all of europe? Asia and even Africa?

    Most people pay full dollar for their mobile phones and smart thingies everywhere else hence there is money to be made by the manufacturers, maybe not to the extent of Microsoft and P.c’s but there is money

  8. Contrarian wrote, “their “monopoly” of the x86 client platform software business is as solid as it ever was”

    Nope. Chuckle. Businesses are allowing employees to drag in personal computing devices and hooking them up to the LAN. That requires businesses to provide more web apps. That does threaten the monopoly. Where my son works, employees are encouraged to do that and he uses the same device and GUI at home and at work and it's all browser-based. The more ordinary people use ARMed devices, the more businesses will slurp them up. Salespeople and travelling (even down the hall) business people love mobile devices. Teachers do. Last year all the visiting consultants arrived with notebooks weighing tons. They will love to use a tablet weighing half as much or less. They will love not having to carry along a charging brick and finding an outlet for it.

    You can bet your boots that x86, M$ and Wintel are all threatened by ARM. That's why M$ is attempting to put out a version for ARMed devices. They are struggling with that or they would have done it last year. They produced Phoney "7" which could not even cut-and-paste. You can bet they are scared if they released something unfinished to try to freeze the space. It didn't work for phones and it will not work for tablets and they will not be able to keep ARM out of desktops and notebooks.

  9. Contrarian says:

    “There is no way for M$ to dominate mobile and no way for M$ to keep ARM+Linux out of desktops, notebooks, and servers. ”

    I think that is probably true in terms of what Microsoft can or cannot do in regard to creating a dominance of the mobile platform market. What I am saying, though, is that their “monopoly” of the x86 client platform software business is as solid as it ever was. If there is a dollar to be made in that business, it is still Microsoft’s dollar and collectively it adds up to some $14 billion last year and is still growing.

    I don’t think that any company could create the kind of money machine in mobile that is the standard for the “conventional” PC. For one thing, that money does not even exist in that business. Phones have an OS, but the cash that flows around phones is mostly in regard to the service itself. Hardware, for the consumer, is almost totally subsidized by the carriers who give away the phones to obtain the service subscriptions.

    The way that I see it, the OS platform for a phone is not an issue with consumers who are only concerned with the “apps” that go with the phone. Most apps are available for all phone types, it seems, and whether there are 100,000 different apps for accessing your stock account or 1 really does not matter much as long as at least one is available. Phone apps are ever so easy to design and develop, too, and there is very little to do to set one off from the next. Social engineering is the key to a popular app, but that is a will-of-the-wisp sort of thing in terms of longevity.

    I think that it is a much more interesting situation when it comes to the continuation of the client environment. The community preview of Windows 8 and the peek at OS X Lion show an abrupt change in the nature of the client OS that Microsoft and Apple are committed to making happen. The Linux future, it seems to me, is in the hands of Google’s Android produc and I wonder if Google is up to the task. I don’t see where they have enough skin in the game to cause them to commit the funds necessary to stay in the pot.

    ARM is not a factor particularly since it is no longer the exclusive province of Android/Linux. The same factors that turned the netbook from being a Linux based product to being a Windows based product are still controlling the business.

    Ditto the server business. Linux shops will buy Linux on ARM and Windows shops will buy Windows on ARM if/when they buy ARM at all.

  10. M$ was granted a monopoly on the IBM PC by IBM. That is not going to happen in mobile. There is no IBM of mobile. ARM has dozens of companies working on the chips. There are half a dozen OS for ARM. No monopoly. That’s good for end-users but not good for M$. They have, what, 6% share of smart phones?

    There is no way for M$ to dominate mobile and no way for M$ to keep ARM+Linux out of desktops, notebooks, and servers. The people who fell in line with exclusive deals with M$ are not in the picture. We have Samsung, Archos, and many others with no interest in the monopoly producing smart thingies and M$ has no control over them and M$ is coming to market years too late.

  11. Contrarian says:

    “This situation means the monopoly is stalled…”

    Microsoft was adjudged to have monopoly power in the x86 desktop operating system software market and I don’t see where anything has changed. There are newer things for sale that Microsoft does not have much of a hand in, but they still make over a billion bucks a month from PC OS. Apple has sold a lot more product than they had been selling in the past decade, almost twice as much if my memory is correct, and maybe that represents a loss of business for Microsoft. But Microsoft has almost doubled its business in that same period as well.

    Today, Apple is the big news in phones and tablets, and they rule the roost about the same way that Microsoft does in the PC arena.

    If anything, the outlook for phones and tablet software apps is a lot less exciting than PC software. The apps are the environment, it seems to me, but they all look the same.

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