Broken Laptop Prompts Look at Changing Market (Opinion)

My brother called to ask me what the seven beeps his laptop was making in the process of refusing to boot up might mean. After getting the exact model number from him, a quick Google search confirmed what I expected — processor failure.

His next question was whether he should have it fixed or buy another one. My answer was simple. “No” and “no.”

While the laptop computer market is not dead yet, the laptop as we have known it for the past few years is on its way out. In fact, computing as most of us have known it for the past many years is on its way out.

Check it out. Intel just announced its year-over-year sales would be at least $1 billion less per quarter — a drop of more than 7 percent. Other chip makers have forecast similar results.

A recent report from HIS iSuppli made the direction clear. While the market for microprocessors is expected to more than double by 2016, Intel’s share of that market is expected to drop from 41 percent in 2011 to just 29 percent.

The Microsoft Windows operating system is expected to drop from a 44 percent share in 2011 to a 33 percent share by 2016. This means that 72 percent of new devices purchased between 2011 and 2016 will not use a Microsoft operating system.

That’s amazing considering that Microsoft not long ago held more than a 90 percent market share in this space.

But the space has changed. Devices are no longer just confined to desktops and laptops. During 2012, smartphone sales will top laptop sales by a 3-to-1 margin. Tablets are expected to equal laptop sales by 2016. Apple and Google today control the operating system market for smartphones and tablets.

Both HP and Dell PC sales were down year over year by more than 10 percent in the last reporting period. The only vendors growing are those that focus on “ultrabooks” or very high-end laptops.

An “ultrabook” is a very thin, lightweight laptop that typically features a solid-state hard drive rather than the regular mechanical “hard disk.” Solid-state drives are pure memory and thus can operate very fast. The MacBook Air was the first entry into this category and Apple continues to provide the latest and greatest products in this space. Other vendors are moving rapidly to catch up, and are already bringing a variety of products to market.

For mobile computing, smartphone, tablets and ultrabooks are the future. Tablets are expected to continue to grow rapidly as users decide they are useful for more things than just reading emails, news, books, Twitter and Facebook.

Microsoft definitely sees the trend and is responding. The Windows 8 operating system is designed to take users from phone through tablet through laptop to desktop with only one operating system needed. Their new tablet entry, the “Surface,” will come to market at a price point designed to take share from Apple iOS and Google’s Android operating systems.

Microsoft’s challenge of perfecting an operating system that will cover the range of devices they have planned will not be easy. Corporate users still have a large percentage of devices running Windows XP. Windows 8 will allow purchasers to step back to Windows 7. It is expected corporate users will take advantage of this in large part, which will greatly delay the adoption of Windows 8.

So what should my brother do about his laptop with the failed processor?

He should question why he even needs a laptop. Unless he is going to create heavy spreadsheets or do high-end graphics, a tablet will probably more than meets his needs for $400 to $500.

If he decides he must have a real computer, then he should look strongly at the available Windows ultrabooks and Apple’s offerings. No need to spend more than $1,200 to get something really light and useful.

He’ll regret it if he just buys another one like the one that just broke.

Steven Hankins is CEO and co-founder of Accio.us, a technology company providing advisory and management services for small to medium-sized businesses. He can be reached at [email protected].