The PC is dead, according to the inventor of the PC, IBM Corp. In the letter to shareholders which was sent out with IBM’s annual report, CEO Louis Gerstner wrote The PC era is over. He continued this is not to say that PCs are going to die off, any more than mainframes vanished when the IBM PC debuted in 1981. But the PC’s reign as the driver of customer buying decisions and the primary platform for application development is over.
E-business and the network are now the most important business drivers, he said, and PDAs and appliances are the devices of the future. One market research firm predicts that sales of non-PC internet devices will surpass PCs within five years, he said.
While Gerstner’s comments echo those from Sun Microsystems CEO Scott McNealy and Oracle Corp chief Larry Ellison, they came in response to the $992m loss by IBM’s PC unit, revealed in the report (CI No 3,626). Overall, according to Dataquest figures, PC shipments worldwide grew 15% last year, reaching 93 million. IBM held on to its second place in the market after Compaq Computer Corp, but saw shipment growth of only 9.5%, compared with Compaq’s 20%, Hewlett-Packard Co’s 25.5% and Dell Computer Corp’s 65%. But price wars, and a softening demand for high-end PCs, slashed the profit margins.
IBM hopes to make more money out of its PC unit this year through the $16bn OEM deal for parts it struck up with Dell earlier this month.
