The Post-PC Era

Mobile computers take over the PC market: The Post-PC Era begins
August 27th, 2011. By Claudio Osorio. The Post-Pc world is a brand new global computer market where desktop and laptop computers are quickly being outnumbered by smart-phones and tablets. The 30 year old and seemingly unbreakable paradigm that personal computers (PCS) are either a desktop or a laptop has been crushed in less than 4 years as tablets and smartphones are in high demand and have become very powerful computing devices as well. Desktops and portable (laptops) computers remain difficult to use for the mainstream of the world population. To the contrary, the new generation of mobile computers (smart-phones and tablets) are not only easy to use and hand-carry by anyone on the planet but are fundamentally highly sophisticated computing devices that also work as a phone, gaming device, media player, book reader, etc., Hence, in the PostPc era the new paradigm is that a personal computer (PC) has 3 categories: 1) Desktop Computers, 2) Portable Computers (laptops and netbooks) and 3) Mobile Computers (tablets and smart-phones). With the emergence of smart-phones and tablets, a computer has now become a mobile ubiquitous appliance easy to learn and use and thanks mainly to a seemingly endless supply of hundreds of thousands of software applications ("Apps") that can enhance almost any facet of our personal or professional lives as well as easy to learn intuitive hand gestures that enable users to operate smart-phones and tablets by touching, swiping or even pinching a screen, complexity has been taken out of the equation so people of all ages worldwide are rapidly not only embracing mobile computers but since the vast majority of mobile computer owners are not content generators (as traditional desktop or laptop users are) but voracious content consumers! a new market has emerged; not of hundreds of millions but of billions of users, units and downloads per year. According to apple as of august 2011, 130 million books, 15 billion songs and 15 billion software apps have been downloaded by iPhone and iPad users. Further, market numbers for the second quarter of 2011 show that a significantly larger number of mobile computers, 118 million (smart-phones and tablets) were sold around the world than desktops and laptops, 85 million. The new global computer market aggregate number of units for Q211 was 203 million which probably means that with strong year end sales the post-pc era global computer market will exceed 1 billion units in 2011.

Table 1. Post-PC World Global Computer Market Share Q2 2011 Manufacturer Apple Samsung Nokia HP RIM HTC Dell Lenovo Acer Others Total Includes:Desktops, Laptops, Tablets and Smart-Phones Source: Canalys and IDC Whether we want to classify personal computers (PCS) according to their functionality or their mobility in the end is all semantics as they are all computers. The market trend is clearly mobile computers and the numbers clearly reflect so. Per example, it took 30 years for desktop and laptop quarterly sales to reach 85 million units in contrast it took less than 4 years for mobile computers to crush that quarterly number with 118 million units sold in Q2 2011. Accordingly, going forward all computer market data has to be adjusted to recognize this simple fact; smart-phones and tablets are fundamentally computing devices. To ignore this is to provide incomplete data about how many computers are really being sold around the world and who are the new market leaders in personal computer hardware sales and operating systems powering them. In the post-pc era personal computers and phones are quickly morphing into one of the same and as mobility becomes the driving factor the entrenched market leaders are no longer such. Hence, the new global computer market marks not only the end of mobile phones as simple communication devices and personal computers (PCS) as niche products but also marks the end of the era of market dominance for market leaders; Nokia in mobile phones and Microsofts in PCS with its windows operating system ("OS"), as market share data for operating systems from the second quarter of 2011 clearly indicates. Table 2. % Qty. 16.4% 33,493,640 8.5% 17,300,000 8.2% 16,700,000 7.5% 15,280,400 6.1% 12,400,000 5.7% 11,700,000 5.3% 10,827,750 5.1% 10,354,590 5.0% 10,243,790 32.2% 65,533,030 100.0% 203,833,200

Post-PC World
Global Computer Operating System Market Share Q2 2011

Manufacturer Microsoft Apple Google RIM HP Nokia Other Includes Desktops, Laptops, Tablets and Smart Phones Source: Nielsen, Canalys and IDC

OS Windows OS Android RIM Web OS (Palm) Symbian Other

% 45.0% 21.2% 20.4% 10.4% 1.0% 1.0% 1.0% 100.0%

So, even though Microsofts windows operating system ("OS") will continue to dominate the desktop and laptop computer market with a market share in excess of 70%, in the gew global computer market including tablets and smart-phones microsoft's 95% market share has already dropped to less than 50% and its projected to continue to drop to 45, 35 and 25% of the market for the the years 2011, 2012 and 2013 respectively. In the new global computer market the winning operating systems for mobile computers are apple's iOSX and google's android. And they win for two main reasons, the size of the user base in mobile computers being several times larger than the PC user base and the sheer size of their web based content stores for video, music and books (iTunes) and software applications stores ("App. Stores"), where all the new mobile computer users shop for their content (video, music, books, magazines, newspapers, etc) and software (Apps.). As of august 2011 apples 425.000 and androids 250.000 available software apps. (available at their app. stores for downloading) make it virtually impossible for anybody else to catch up and play and be relevant in this market. As mobile computer usage spreads around the world both apple an androids content and app stores will explode in size and number of users. In turn, the scale of both app stores will render all other operating systems (with the exception of microsoft) into niche players without market relevant OS'. In the new global computer market tablets and smart-phones projected global sales are 537, 738 million and 1,143 billion units. desktop and laptop computers 387, 440 and 485 million and on a consolidated basis 925 million, 1,179 and 1,628 billion units in 2011, 2012 and 2013 respectively. It's a market of billions of units meaning that with these volumes the next level will be reached in the dissemination of computers and web usage to every corner of the world and a significant percentage of the world population. Table 3. Post-PC World
Global PC Market forecast (in 000's) Year / Share % 2011 PC 387.8 Tablets 69.8 % 41.9% 7.5% 2012 440.6 108.2 % 37.4% 9.2% 2013 485 294 % 29.8% 18.1%

Smart-Phones Total

467.7 925.3

50.5% 100.0%

630.4 1179.2

53.5% 100.0%

849.7 1628.7

52.2% 100.0%

Source: Gartner and IDC Includes: Desktops, Laptops, Tablets and Smart-Phones

The New Global Computer Market also represents the amazing and stunning comeback of Steve Jobs and apple as one the Industry leaders and in the most improbable fashion, Jobs bet that if software development could be unleashed and then made available to the user in the form of countless and useful applications and if complexity of use could be eliminated then the computer market would not be a niche market but a massive worldwide market where almost any person on the planet could be using a computer overnight. Apple has effectively pulled itself out of the 4 to 5% PC market share it was permanently boxed in by microsoft during the last two decades! apple s OSX + iOSX OS total market share in the new global computer aarket will represent 25, 27 and 29% in the years 2011, 2012 and 2013 respectively. But if relative to its OS' OSX and iOSX, Apple continues to treat as competitors the likes of HP, Acer, Dell, Lenovo, Motorola, Samsung, LG, Etc., instead of treating them as customers and points of sale (As Google's Android does), Apple could again find itself in familiar territory of having reinvented the industry and taken the personal computer to the entire world population but not being the market leader in the end game (at least this time not obliterated but as one of the market leaders). The new global computer aarket also represents the equally amazing, rapid and unexpected emergence of Googles Android OS as Apples iOSX OS nemesis, and its a formidable adversary. googles android by precisely doing what Jobs isnt has captured most smart-phone makers in the mobile computer market as the likes of Motorola, HTC, Samsung, LG, Etc., have or are releasing Android OS smart phones and by virtue of more points of sale and multiple brands against one (Apple), android will likely grow faster and have more critical mass than Apple eventually surpassing it and becoming the market leader by 2012. But apples tightly integrated strategy of hardware/software design and development perfectly coupled into their iTunes and App. Stores creates a better and easier user experience than Android's; add to it a captive customer base of 225 million iTunes customers worldwide with active credit card accounts and androids multiple brands and points of sales growth strategy may not outpace apples by much. Additionally, apple's revenue, earnings and cash reserves growth is significantly outpacing every other player in the industry validating at least financially their "Go at it Alone" OS market strategy. Current market players Nokia's Symbian, Blackberry's RIM and Microsoft mobiles OS growth in the new global computer market without the muscle of large enough Content and App storefronts will stall and their estimated market share will likely decline from 16, 7 and 5 to 11, 10 and 3 to 7, 6 and 1% in the years 2010, 2011 and 2012 respectively. This rapid market share decline will make it likely that by 2012 both Symbian and RIM OS will suffer the same fate as HP web OS (palm), they will drop out of the market or will become (relative to the new global computer market) marginal (Nokia) or niche (RIM for business) players therefore causing their brands Nokia and Blackberry to likely merge into PC manufacturers in order to

consolidate revenues and preserve market share as "Branded hardware manufacturers" without proprietary operating systems. Both these mergers will likely be into the likes of HP, Dell, Lenovo, Acer or Toshiba, etc. as these PC manufacturers will also seek to remain market relevant. In turn, Microsofts mobile OS will remain what OSX is to Apple in the PC space, a marginal niche player. During this consolidation period significant opportunities may arise and Microsoft, Google and Apple sitting with large cash war chests may have game changing targets come their way. Googles Android OS total share in the new global computer market will be 20, 125 and 30% versus Apples iOSX OS 25, 27 and 29% market share in the years 2010, 2011 and 2012 respectively. So, by 2013 Android will be not only larger than Apple (3rd) but it will also surpass Microsoft (2nd) becoming the leading operating system of the new global computer market. If 2011 will be a year of positioning and mostly jockeying for positions, by 2012 the market will likely be much better defined with market consolidation of operating systems into Android, Microsoft (PC and Mobile) and apples (OSX and iOSX). Also, the sheer size of the market opportunity will precipitate rapid decisions to consolidate operations between branded hardware makers without market relevant OS. They will seek to preserve and strengthen their market share in the newly consolidated market. Without market relevant OS it is probable that all of the branded hardware manufacturers will be eager to carry products with Microsoft, Google's Android and Apple's OSX and iOSX OS. So, will the market see a dell OSX licensed PC or an HP iOSX powered tablet or a Motorola iOSX powered smart-phone or and Acer iOSX licensed mini-tablet (iPod Touch alike) competing with Apple's branded OSX and iOSX products? This would seem the natural move for apple to do next. One perhaps its competitors fear the most but one Jobs may never take but perhaps apple's new CEO will. It is a move that could be a checkmate in terms of OS market dominance by apple. Is it worth it? It could certainly be, after all the target market now is the ultimate prize, the entire world population.