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How the iPhone meteor killed dinosaur PCs

On January 9 2007 Apple chief executive Steve Jobs stood on a stage and showed the world the iPhone.

It seemed important at the time. Yet nobody knew just how significant this would turn out to be.

Thanks to the iPhone Apple became the world’s most valuable company. It defined our times.

It isn’t hyperbole to divide the history of personal technology into eras before and after iPhone.

End of the consumer PC

Apple’s iPhone did something else. It killed the consumer PC market. This didn’t happen overnight and it hasn’t finished yet. But it happened.

It may seem remarkable to talk about the death of consumer PCs when one contemplates the massed ranks of glowing Apple logos one often sees on laptop lids. But, while those computers may be fun, they are mainly used for work or education. They are not mere consumer computers.

PC sales didn’t stop immediately. It took until four years after the first iPhone appeared for sales to peak.

From business to consumer and back again

In 2011 the world bought 380 million personal computers. According to IDC, consumers purchased 54 percent, a little over half the total. The rest went to businesses and government.

Since then PC sales numbers have dropped. Or to put it more accurately; they have dropped off a cliff. By 2015 the total market had fallen to around 275 million units a year. Consumer PC sales fell faster than business computer sales. IDC put the consumer share of the total sold in 2015 at around 49 percent.

In round numbers that means consumer PC sales dropped by around one-third from roughly 200 million to 130 million. That fall took four years.

The end of the world as we know it

It is not the end of the PC story. It is the end of a chapter.

Analysts like IDC and Gartner expect PC sales will continue to fall over time. They think that, eventually, business computer sales will stabilise.

For now there is still a need for workers to use desktops and laptops to keep the wheels of industry spinning. Long term that market is also at risk.

Happy days

Nobody makes a similar optimistic forecast about consumer PCs. There is no happy ending in sight. The end point may or may not be where zero consumer PCs are sold. If we stabilise at a point before that one, the number will almost certainly be a tiny fraction of the 200 million units sold in 2011.

Almost overnight PCs are less relevant to people’s away-from-work lives.

IDC runs a programme called ConsumerScape 360 to track how people use technology. In 2012 about 90 percent of PC owners would check email on their computers each day. By 2015 the number had dropped to 65 percent.

Out of favour

If you need to check work mail away from the workplace you no longer have to use a home PC. You can do it just as efficiently on a phone or a tablet.

In fact more efficiently. With a phone or tablet you can reply while on a bus, in a train or while sitting in a pub. PCs are not that flexible.

IDC found similar declines in other popular computing activities. It turns out that when it comes to reading mail, checking news, web browsing and social media, using the PC is often far too much trouble. We now have more convenient devices close to hand all the time.

Planet of the phones

Today, most people are more likely to go to their phone first when doing anything online.

It’s not just Apple iPhones. People also use Android phones from brands like Samsung, Huawei and Sony. They are also using tablets like the iPad, which is, in effect, more phone than PC. But all these devices can trace their roots back to the moment Steve Jobs announced the first iPhone.

That was the turning point.

Rocking all over the world

In developed countries this represents a major change in technology use patterns. It’s an even bigger revolution in much of the developing world: phones the only computers most people in those places have ever known.

Modern smartphones outsell personal computers four to one. Despite the name they are more personal and, sometimes, better computers. They know far more about you than your PC does.

Phones are ubiquitous. About half the global adult population owns a phone. By the end of this decade that number will reach 80 percent.

Replacing PCs the Microsoft way

Even if people buy new consumer PCs, they won’t buy as many or buy as often as in the past. There are tasks which don’t work well on phones and tablets, but the list gets shorter every year[1]. Soon it will be negligible.

Some of those consumer PC replacements will be devices like the Microsoft Surface Pro, which is as much tablet as PC.

After ignoring the march of progress, Microsoft has responded to the change with a dramatic change of focus. It is one company, possibly the only company other than Apple, with the ability to build a tightly coupled combination of hardware, software and services. It comes as no surprise that companies like Samsung and Huawei are now making Surface-like devices.

Microsoft has also responded by bowing to the inevitable and making great versions of Office available to phone and tablet users.

No consumer PC rebound in sight

There’s little question the consumer PC is now in a death spiral. As sales numbers decline, the demand for apps and services declines. Developers will put less investment into satisfying user needs.

What was a virtuous circle fuelling the rise of consumer computing during the 30 years until 2011 has become a vicious circle on the down slope.

It’s hard to see how consumer PCs can rebound from this. At best there will be a long, slow slide into irrelevance. Expect to see PC makers consolidate further, with some brands disappearing. Expect to see hand-wringing at more angst at PC dependent companies like Intel.

Consumer PCs are not dead yet, but it is now only a matter of time. Customers have moved on.


  1. Games are one consumer area where the PC still beats phones and tablets hands down. Even the best iOS or Android games are unsatisfactory compared to PC games. And don’t get me started on the horror of “in-game payments”.  ↩

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16 thoughts on “How the iPhone meteor killed dinosaur PCs

  1. I’m not convinced that the iPhone was the reason for the change in the PC market. I think it might be a factor, but there’re many other things, to do with the maturity curves and performance gains of PC hardware, and the relative lack of sophistication/advancement of PC software (by which I mean software and underlying operating systems running on PCs regardless of make). Also, I’m not convinced that smart mobile devices only came about because of Apple, although I acknowledge that Apple’s initial heavy investment in the iPod and iPhone accelerated the speed with which touch-based devices achieved the necessary manufacturing scale to become widely affordable. I’d argue that the pervasiveness of non-PC computing devices owes at least as much to open source platforms like Android and cloud-based infrastructure (which all depends on open source software under the bonnet) as it does to Apple.

    1. You make some good points here. They touch on deep and important issues that I’ve thought about in the past. It’s not so much a case of agreeing or disagreeing as teasing out the underlying ideas about how innovation happens and how technology evolves. If I can organise my thoughts and find the time, I’ll respond with a fresh post.

    2. That’s a hefty footnote, games if it was the only task left to desktops would be a significant market, there’ll be a living made there for certain.

      Builder/makers are I think attracted by the wide open spaces that LoRa and other “IoT” technologies put in the hands of most anyone with an interest and may move away from the PC as a platform. Or not, this isn’t an existential threat, just a dominance shift.

      While there’s often a coup de grace, in most cases something’s been saturated or in decline for some time before the chronologically most contemporary threat gets the lion’s share of the responsibility.

      1. Agree. Although the games industry could easily, ahem, lift its game on tablets and phones.

        The last point is interesting. Let’s re-cast that as “Would PCs still be in decline if the iPhone and iPad never happened?” I’m going to address that in a separate post, but the short answer, as so often the case in these matters, is… “It depends”.

  2. There’s no question PC sales are down. Nor is there any end to the fall in sight.
    This could be the post-PC era. Or maybe something more subtle is happening. Either way, the familiar personal computer no longer tops the technology food chain.
    How the iPhone meteor killed dinosaur PCs, says the decline is due to Apple’s 2007 phone launch.
    Dave Lane thinks it overstates Apple’s role.
    Lane writes:

    “I’m not convinced that the iPhone was the reason for the change in the PC market. I think it might be a factor, but there’re many other things, to do with the maturity curves and performance gains of PC hardware, and the relative lack of sophistication/advancement of PC software (by which I mean software and underlying operating systems running on PCs regardless of make).
    “Also, I’m not convinced that smart mobile devices only came about because of Apple, although I acknowledge that Apple’s initial heavy investment in the iPod and iPhone accelerated the speed with which touch-based devices achieved the necessary manufacturing scale to become widely affordable.
    “I’d argue that the pervasiveness of non-PC computing devices owes at least as much to open source platforms like Android and cloud-based infrastructure (which all depends on open source software under the bonnet) as it does to Apple. [1]

    Broad sweep of history
    Lane has a good first point. He makes the case for the broad sweep of history applied to technology.
    It’s a complex idea and hard to do justice in passing. But here goes:
    This view of history says the big picture is more important than individuals.
    So, say, there would have a Russian Revolution early last century with or without Lenin’s involvement because the right conditions were all in place at the time. Or a European would have crossed the Atlantic at the end of the Middle Ages, it just happened to Christopher Columbus working for the Spanish.
    With or without you
    In a technology context, you can read this as: The drop-off in PC sales would have happened even if Apple never made the iPhone.
    This is right. Towards the end of this century’s first decade, the PC market in the developed world reached saturation. Anyone who wanted a PC had one.
    Prices were, in relative terms, cheaper than ever. And there was a glut of reasonable quality second-hand machines. This made the technology available to almost everyone in the world’s richer countries.
    This means the PC market, at least in the developed world, had become a replacement market. There were no new markets to expand into. That alone would be enough to halt sales growth.
    Better computers
    At the same time, PCs improved to the point where regular upgrades were no longer necessary. PCs were better made, the parts lasted longer between failures.
    Another aspect of the changes was the shift from desktop software to cloud apps meant much of the heavy lifting was now done elsewhere.
    This meant people could hold on to existing hardware for longer. In some cases far longer. In the 1990s PC makers wanted us to think computers needed upgrading every two years. In reality most of us could hang on for a little longer. By 2007, we could hang on for a lot longer.
    Better software
    After years of needing constant hardware upgrades, Microsoft’s operating system upgrades stopped being so power-hungry. Windows 7 was less demanding than the forgotten, unloved Windows Vista.
    It was much the same with apps. The age of bloatware came to an end.
    This happened years earlier in the non-Microsoft world. That’s another story.
    Change
    Those changes, and in some cases lack of change, were real enough. Until the late 1990s, PC hardware and software leapfrogged each other in, depending on your point of view a vicious or virtuous circle.
    So yes, PC sales would have slowed or dropped without Apple’s iPhone launch.
    Lane says “Apple may have been a factor”. When overlaid on top of the other, broad sweep of history change, Apple’s influence was profound.
    The iPhone kicked the PC market when it was already down. It turned up at the party at precisely the moment when users were casting around for an alternative.
    There’s no question smart phone sales, or for that matter tablet sales, displaced PC sales. The iPhone accelerated a trend that had already started.
    Cause and effect
    Lane’s second point: “I’m not convinced that smart mobile devices only came about because of Apple”.
    Again, this is correct. Smart mobile devices were around before the iPhone. We called them Blackberries. They were strictly business class devices. You either needed corporate services or had to pay a king’s ransom extra for the push mail service.
    Apple’s iPhone democratised smart mobile devices. This may seem a strange thing to say when most people see Apple as an expensive, premium brand. Yet compared with Blackberry, the iPhone was much cheaper to own and run.
    Breakthrough
    Could anyone else have made the smart phone breakthrough?
    Many tried. There were plenty of other candidates at the time. Nokia lead phone sales. Motorola was a strong challenger. Palm had the Pilot, there was a phone derivative. HP and others made Windows Phones.
    Here’s the problem. Large corporations with the talent, resources, infrastructure and capital needed to develop great products are often unwilling to take the necessary risks. In many cases potential breakthrough products sit moldering in the skunkworks while the corporate sails blithely on.
    Microsoft couldn’t
    It’s unlikely Microsoft could have made an iPhone breakthrough. But even if it did, the management at the time would never have unleashed a product that might disrupt the company’s monopolistic grip on personal computing.
    Windows Phone 8 was a nice phone OS, but it was too late. Remember, at the time the iPhone appeared Microsoft was the world’s biggest, richest, company. It took Microsoft years to realise its core business was undermined by the iPhone.
    Samsung’s pre-Android phones were pitiful. So were Motorola’s first attempts as phones. Nokia didn’t get it at all.
    Apple ready
    What Apple did was pull everything together in a single, elegant, approachable product. You didn’t need to read a book to know how to use it. No-one else had all the parts ready to go at the time.
    Apple had the sense to parlay its experience making computers and iPods into a great phone. It wasn’t perfect, but at the time it was as near as possible.
    Most important of all. Apple had nothing to lose and everything to gain from the iPhone.
    Android
    Android was a blatant copy of the iPhone. The original development team may have had embryonic phone software in the works, but when the iPhone arrived, it scrapped plan A.
    No-one else had the scale, the infrastructure, the expertise or the pile of cash earned from selling iPods. No-one else had the motive to disrupt the phone market.
    If you like, Apple also had the ecosystem — although that’s a much-abused jargon term that can mean whatever a marketing person wants it to mean. Let’s not go down that rabbit hole here.
    Not just Apple
    So while it’s true we would now be using some form of smart mobile devices even if Apple stuck to making Macs and iPods, the change happen when it did because the company went out on a limb. That’s the broad sweep of history again.
    Yet Apple managed to democratise the business, dress it up in a format ordinary non-geek consumers could understand and relate to. In doing so. It made more money than any other company in history.

    Let’s leave the secret and un-celebrated triumph of Open Source for another time.

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