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Face-Off: Does HP's PC Business Affect Us Enthusiasts?

What's This "Post-PC" Era?

Alan: HP bet big on PCs, and we're entering the "post PC" era. This isn’t just me joining the post-PC bandwagon. We saw a taste of the post-PC world in Japan with NTT DoCoMo's i-mode more than a decade ago, and today's 3G/4G world and today's smartphone is the global reality of that original vision. Today, except for games and content creation, you can consume most of your entertainment and information on lower-powered devices like tablets, smartphones, smart TVs, and devices like a Boxee or Apple TV. My Core i7 standard voltage ultraportable laptop offers more performance than the original eight-core Xeon workstations. This means that the market for desktop PCs is going to shift to a world of increasingly-powerful laptops, and the market for laptops is going to shift toward next-generation smartphones and tablets.

So, who would want to buy a whole new PC business?

Chris: Of course, I'm obligated to step in here. IBM's CTO Mark Dean recently discussed moving beyond the PC and using a tablet as his primary computer. His assessment was indicative of IBM's growth strategy, which involves exiting commodity businesses to pursue higher-value markets. However, I believe it prematurely discounts the role PCs will continue to play in our lives.

While it's true that mobile devices, by virtue of more advanced architectures and manufacturing technology, continue offering more compute power at similar (or lower) power levels, software developers remain viable by exploiting the capabilities of less constrained form factors, and pushing their ideas down into more portable platforms as they evolve. You can do things with a notebook today that required a 2P workstation in the past. Sure. But what can today's 2P workstations do? Data from Intel suggests that 10 Xeon E5645-based servers can achieve the same performance as 18 Xeon E5607-based servers for $20 000 less—and that's within the same generation of hardware! Just think about the ways PC technology will continue to enable opportunities for SMBs that only an enterprise would have been able to afford five years ago, and how that same progress affects desktop users.

"But Chris, it's your job to defend the PC; you represent a PC hardware-oriented property." I recognize this, of course. The fact remains that building and selling PCs is still a high-revenue business for HP. But the company's lack of added value makes it a low-margin opportunity. Let that be a lesson to more nimble organizations: value is the key to making money in a mature marketplace. And as HP waffles with its profitable-but-fiercely-contested PC business, other organizations have the opportunity to differentiate their own products. Saying you're now going to operate like a start-up doesn't mean you're actually able to follow-through, HP.

Alan: Yeah, but the world is made of creators and consumers. The PC is going back to its roots as a tool for the elite, rather than the masses. The masses are going to be consuming all of their media and accessing the Internet on their mobile devices. It's 1984 all over again. The big difference is that, "back in the day," building your own computer was cheaper than buying a computer. In 2011, that's not true. The reason to build a computer is that you can get the parts you want (which ultimately are cheaper than buying a pre-built computer and then upgrading it). The other reason to build a computer is that modern desktop CPUs are so ridiculously overclockable that the overclocking is how you make your money back.

Chris: But you can't just split everyone up into creators and consumers. I might be a creator by day and a consumer by night. That's why it's so common to find both desktop and mobile hardware under the same roof. The problem is that the desktop market is mature and less susceptible to the subsidized upgrade cycle the smartphone business encourages. So of course that's where the growth is.

Chris Angelini
Chris Angelini is an Editor Emeritus at Tom's Hardware US. He edits hardware reviews and covers high-profile CPU and GPU launches.
  • mayankleoboy1
    who is alan dang?
    Reply
  • AlanDang
    Who is Alan Dang? He is supposed to be Turkish. Some say his father was German. Nobody believed he was real. Nobody ever saw him or knew anybody that ever worked directly for him, but to hear Kobayashi tell it, anybody could have worked for Soze. You never knew. That was his power.
    Reply
  • tacoslave
    AlanDangWho is Alan Dang? He is supposed to be Turkish. Some say his father was German. Nobody believed he was real. Nobody ever saw him or knew anybody that ever worked directly for him, but to hear Kobayashi tell it, anybody could have worked for Soze. You never knew. That was his power.calm down kevin spacey
    Reply
  • cmcghee358
    Good analysis. The last bit really made me like HP, even though their consumer PCs are cheap enough to justify custom builds to my customers.
    Reply
  • nevertell
    Does HP's PC Business Affect Us Enthusiasts?

    No, it doesn't.
    Reply
  • demonhorde665
    nevertellNo, it doesn't. cheers TO THAT , dumbesta rticle ehader i've seen on tom's todate

    NO real enthusiast buys name brand , they build thier own period. pfft , alien ware, lenovo HP just pffft only a wanna be enthusiast would bther with any of these
    Reply
  • nerrawg
    Good article on a topic that I think a lot of enthusiasts have been dreading. I find it interesting that you guys often metaphorically relate hardware development back to the automotive industry. If PC hardware is the cars, then software is the road network that people driving have to put up with. At the moment I believe that in both cases it is the roadnetwork/software that is the limiting factor. This decade has given us the most thrilling performance cars with incredible bang-for-buck such as the GTR, Corvette, Camaro, M3, Focus RS etc etc. However most of these cars are so fast that most people could never really use them to their potential on a day to day basis. The same can be said about modern PC hardware - its overpowered for the average user. Only the relative handful of consumers who take their GTR to the track on weekends/spend their weekend playing FPS games, can actually take advantage of these products. This in turn is severely limiting the market potential of what on the surface looks like such an amazing product base. People know that even though 0-60 in 3.5 and top 180 is incredible, it makes no difference when your stuck starring at fenders and red lights all day.

    Really, the development in hardware tech is amazing, but what we need to keep it moving is a new class of ubiquitous productivity software that demands better hardware. My suggestion for this is to create more advanced interfaces between the user and the PC - we need to replace the mouse and keyboard with motion detection devices and speech recog that actually works. Once the software can do this I believe we will see a drastic increase in performance demand for office software.
    Reply
  • ZakTheEvil
    If you buy HP computers you're not an enthusiast. PC enthusiasts don't give rat's ass about HP.
    Reply
  • christop
    Enthusiasts and H.P don't go together..
    Reply
  • legacy7955
    This so called article sounds like "marketing" to me
    Clearly an agenda going on here, excessive greed by Leo Apotheker and his clown posse.

    Notice that "they" keep trying to "INFER" that the PSG division is NOT profitable without saying so, but then have to admit that it IS profitable.
    Reply