Why the PC just won't die

Shawna Ohm

The PC is not dead, at least not yet, despite the rising popularity of tablets, “phablets” and smartphones - large and small. According to a July report from Gartner, the personal computing market will experience a “relative revival” this year.

Of course, by “relative revival” Gartner means the PC market will continue to decline in 2014, just not as much as it did in 2013 (slowing 2.9% versus 9.5%, respectively.) The real revival may happen in 2015; that’s when Gartner sees PC sales actually increasing again – jumping 5.3%.

Yahoo Finance contributor Henry Blodget said, “This is far from a revival. We’re talking about a market that was the entire computing market fewer than 10 years ago.”

Still, Blodget said that as long as people need to go to work every day, personal computers will live on. “Lots of CEOs talk about, ‘Hey, I run the whole company on my smartphone,’” he said. “It’s because they don’t actually have to do any work.”

The smartphone may be fine for a CEO who is delegating work, but someone who is creating and using spreadsheets or typing and emailing all day still needs a computer and will for some time, in Blodget’s view.

“For a long time [to come] we are going to use a keyboard and a big screen at work,” says Blodget. “So, the idea that the PC is dead is crazy.”

It may be that one day soon, your “PC” will be powered by a smartphone or a tablet, but that’s a long way off.

For now, tablet growth is slowing. Gartner does predict tablet sales will continue to grow in 2014 with shipments expected to increase 23.9%. It is a testament to just how explosive the growth of the tablet has been that Gartner is characterizing that as a “slowdown.”

But “slowdown” actually may not be a strong enough word. Best Buy (BBY) CEO Hubert Joly recently told news site Re/Code that tablet sales are “crashing.”

According to Joly, the problem facing tablets is innovation. “Once you have a tablet of a certain generation, it’s not clear that you have to move on to the next generation,” he told Re/Code.

It’s actually the same problem that once faced PCs. Joly credits a large part of the PC resurgence at Best Buy to the fact that Microsoft stopped supporting old versions of Windows, which drove people to upgrade.

So far, the shifting PC versus mobile landscape has spelled good news for some of the biggest names in tech – regardless of whether they’re betting on hardware, software, PC or mobile.

Take hardware-maker Hewlett-Packard (HPQ). The company recently saw revenue grow in its PC unit for the first time in years. The shift was so inspiring it led CEO Meg Whitman to declare the company would double down on hardware. HP stock is up about 30% year-to-date.

On the software side, no one is benefitting more than Google (GOOGL). The company’s Android software remains the undisputed king of mobile computing. The number of shipped devices running Android will jump 30% in 2014.

Even the oft-maligned Microsoft (MSFT) may have finally caught a break. According to Gartner, “Windows phones will exhibit strong growth from a low base in 2014, and are projected to reach a 10% market share by 2018 — up from 4% in 2014."

And of course – there’s Apple (AAPL). The company – which integrates hardware and software to a level no other company has yet mastered – is still seeing growth. Shipments of devices running iOS will jump 15% in 2014.

So with all of this in the mix – it’s hard to predict what exactly the future of “personal computing” will look like. According to Blodget, “The jury is still out,” and it may be a while before we get a verdict.