Are Personal Computers Passe?

Electronic News, July 9, 2001 by Bernard Levine

Wireless wonders are great, but don't write desktop obits just yet

So now it's supposed to be the post-PC era. Wireless electronics, PDAs and handhelds are everything. Wait--not so fast. No doubt a wireless revolution is underway, ushering in an incredible new world of handheld electronics. But don't write off big, old-fashioned PCs and other wired electronics just yet.

I have repeatedly emphasized in this series commemorating my 25th anniversary with Electronic News that great revolutions in electronics take time, invariably much longer than first expected. The PC revolution, one of the most important things I have covered in my years here, isn't done yet. I hope not! I just bought a new desktop PC for home and got plenty of bang for the buck in a buyer's market. I own handheld products as well, but except for my cell phone, these are not the center of my daily attention yet, and I suspect the same is true for many other people.

These observations were reinforced as I walked around the recent PC Expo/Technology Exchange Week trade show in New York. PCs took a back seat at this year's show. In the exhibit aisles, loads of handheld computing gadgets and other new portable wonders were on display from numerous companies, yet if you looked hard enough, you could still find traditional PCs and notebooks.

At the Transmeta Corp. exhibit, I saw many downsized notebooks using the company's chips. But many of these smaller notebooks aren't available in the United States, although they are very popular in Japan. The U.S. market has long favored more traditional PCs and notebooks with as big a keyboard and as many other features as possible. It probably dates all the way back to IBM Corp.'s PCjr debacle and the consumer rejection of its nontraditional Chiclets keyboard.

Carl Yankowski, chief executive officer of Palm Inc., gave a PC Expo keynote speech touting the prowess of wireless electronics. He said, "Handhelds were a grassroots phenomenon, now rapidly evolving into a new computing standard in enterprises of all sizes--fueled by people's desire to be more connected, effective and efficient, virtually anytime and anywhere." Palm's exhibit also showed off the latest mobile products, yet last week Palm reported a quarterly loss.

As I left the Javits Center and walked east on 34th Street into Herald Square and past Macy's, I wondered how many average consumers see the need for all these wireless wonders. Many do, I'm sure. Maybe most of our readers do. Maybe all the people at PC Expo do. Maybe folks on Wall Street, who can make bundles of extra money by knowing every bit of information 10 minutes before everyone else does, do. But most people probably don't, at least not at this time.

Eventually, the killer applications will come along to drive the masses to these products. But it will take time, just like PCs took time, and the home computer even longer.

Most wireless electronic products might take another five or six years to become pervasive. However, some of the companies looking for attention at this year's PC Expo may be counting on it happening in five or six months.

Electronics revolutions, such as PCs, wireless electronics and the Internet, are great, but you can only count on so much, so fast. The current e-commerce shakeout makes that clear.

As Michael Splinter, Intel Corp.'s executive vice president and director of worldwide sales and marketing, said in another PC Expo keynote speech, "People thought the Internet would change everything, but it hasn't changed water into wine, or lead into gold."

Still, Splinter and most everyone else expects the growing use of wireless electronics in coming years. "People will want information when they need it."

The question is how soon consumers believe it and spend accordingly. Even when wireless electronics fully takes off, many people may still want PCs and other more traditional products around as well.

PCs may be maturing, and we may well see a shakeout of personal computer makers in coming years, but PCs still have a lot to offer and surviving PC vendors should prosper. That was what happened in the passive components market I have covered since I got to Electronic News in 1976. Many of the capacitor, resistor and other passives firms I wrote about back then are long gone, but others still enjoy great success today.

The wireless revolution will take time, and pain, but eventually that vision will fully succeed. But don't junk your desktop.