Brooke Crothers writing for CNET:
The price of Windows 8 touch devices, including laptops, will sink to price points that penetrate inexpensive tablet territory. These new “innovative” designs will be based on Intel’s upcoming quad-core “Bay Trail” chip, Intel executives said today during the company’s first-quarter earnings conference call.
“If you look at touch-enabled Intel-based notebooks that are ultrathin using [Bay Trail] processors. Those prices are going to be down to as low as $200,” said Intel CEO Paul Otellini.
If prices are going to drop $200, where’s the room for profit margin? The upside is that if the chips are competitive, it could shake things up in the ARM market, hopefully driving down the prices and at the same time, foster innovation, even though ARM has the majority of the Tablet / Smart phone market, it will be hard for Intel to gain penetration unless they offer bundling deals that make them more competitive. We know that Android is ready for x86. Let’s see how this pans out in 4 months time. After all, we’ve waiting for Intel to make inroads in this market for years.
The real problem for the PC vendors is not that they have such low margins–they’ve had low margins for decades. It’s that the volumes which “made up for” low margins are disappearing. Apple is not immune to a gradual erosion of Mac volumes, but they have positioned themselves for growth with devices and content commerce and services. They have essentially “escaped” PCs and indeed caused the need to escape in the first place.
The problem is what could the others do? It seems all they can do is depend on Microsoft getting their strategy right.
Microsoft’s strategy has been to be everywhere. This worked brilliantly in the past, but the cracks are definitely starting to show. If the next generation of consumer grows up in a tablet household which is dominated by iOS and Android, where does that leave the other Windows hardware vendors? If Apple continues to become more dominant in the desktop/laptop market I ask again. Where does this leave the Windows hardware vendors? This is what makes Android and Chrome on the desktop more interesting. The apps are already here. The hardware stack is in place. The hardware starts at $249 for a good enough machine.
Shara Tibken reporting for Cnet:
The Santa Clara, Calif., company, which makes chips that power the majority of the world’s computers and servers, said its revenue for the first quarter totaled $12.58 billion, down 2.5 percent from the previous year. This number was in line with its forecast in January of $12.2 billion to $13.2 billion in sales. With earnings that match about what analysts had projected, Intel’s view for the second quarter is strong. The company has reiterated its forecast for the full year, despite a weak first quarter in the computer market.
Intel will be fine for a long time. I think they see the writing on the wall and are cleverly hedging their bets. Intel will now work with any vendor who buys their chips. The WinTel of the 90′s and 2000′s are a thing of the past. Intel is taking the smart move by partnering up with Samsung to help create Tizen, an OS that is vaporware, but will launch when Google decides to close Android.
Paul Thurrott of the Windows Super Site adds:
My point being, PCs aren’t actually going away. In the great debate over “post-PC” (Apple’s term for a future in which phones and tablets supplant PCs) versus “PC plus” (Microsoft’s term for a future in which phones, tablets, and PCs co-exist), we seem to be losing sight of the fact that Microsoft’s vision is the more correct one. And that’s because although PCs might be losing out to more personal devices for consumption activities, we still need to get work done. And no offense to the lucky few who can actually get real work done on an iPad, but you’re the exception, not the rule.
I tend to agree with Thurrott. I can get real work done only using my iPad, but it’s not as easy at it would seem. The lack of mouse support is the biggest hurdle I have. Using your finger as the pointing device is fine, but your finger, like any muscle gets tired if you have to hold it in the air for prolonged periods of time. That’s what’s so disappointing about the Surface, Microsoft has created a great form factor with everything that you should need to remain productive. It’s just a shame that no one has noticed. My PC isn’t going away. It came with Windows 8, but I reverted back to Windows 7. I don’t have a touch screen, and I do not find the gestures in any way compelling enough for me to use them full time. I will revisit Windows 8 when I have the hardware that can match the software.