Little, Less, And Loving It
To paraphrase vice president Biden, this is a big f—ing deal. After attending this Moorestown briefing, I walked away fairly convinced that I’d just seen the future of mainstream computing. No, I’m not saying that I think 40% of the market will be toting around Moorestown-based devices next year. I mean that, if certain requisite elements are in place, I see no reason why the median form factor used for computing shouldn’t continue its march from the desktop to the pocket.
Look at these recent numbers from IDC. Desktops are done as a growth vector. Intel and AMD can continue their architectural arms race until the cows come home, but desktop PCs are going to become less and less of a market interest as their static sales become an ever-smaller piece of the computing pie.
In contrast, mobile PC sales are going to more than double in the U.S. over the next five years, and the growth rate worldwide is even higher. Mind you, this only extends down to nettop systems. IDC’s numbers don’t account for handhelds or tablets, which IDC is now “keenly focused on,” according to a recent press release.
Look at the 20-year trend. We’ve gone from a market comprised almost entirely of desktops to one now dominated by laptops. Mobile PCs started outselling their desktop counterparts back in mid-2005. Netbooks arrived in earnest during 2008, and now the diminutive form factor seems to be cannibalizing notebooks. Last year, NPD reported that “once they got home, 60 percent of buyers said they never even took their netbooks out of the house.” In July 2009, DisplaySearch released netbook sales numbers showing that notebook sales actually decreased, while netbooks grew 136.9% year-over-year.
If the mainstream computing market is really more about decreasing size than increasing speed or functionality, then it should have come as no surprise a month ago when Bloomberg Businessweek ran an article that said despite netbooks accounting for 26% of all PCs sold during the prior holiday season, “netbooks' popularity may already have peaked.” IDC numbers show netbook growth plummeting from prior-year levels. The article indicates that while several factors may be behind a 2010 fall-off in netbook interest, the arrival of Apple’s iPad and its imminent horde of competitors may be to blame as the industry looks for “the next big thing.”
Add it all up. While no one disputes that desktops will remain important for several applications, particularly at the high-end, the mainstream will continue to place its dollars into smaller form factors. The only reason people haven’t viewed smartphones as computing devices so far is because they haven’t been powerful enough to take over mainstream computing needs. With Moorestown, I believe we’ve reached a crossover point where that’s no longer the case, and if that’s the case, we’re now in a place where your next phone may also be your next PC.