“The days of paying for costly software upgrades are numbered. The PC will soon be obsolete. And BusinessWeek reports 70% of Americans are already using the technology that will replace it. Merrill Lynch calls it ‘a $160 billion tsunami.” Computing giants include IBM, Yahoo! and Amazon are racing to b the first to cash in on this PC-killing revolution.”
First of all nothing could be further from the truth. The PC has been steadily dying for the last 30 years. It the 1980s it was the workstation networked together in token rings that would kill it – who remembers Apollo and Sun? Then it was going to be the low cost X-terminal – what ever happened to that? In 1992, Silicon Graphics introduced the next generation 3D super computer called the Indigo – is that company still around? In the mid 1990s, Sun came out with Java – the network computing language – that was going to provide a gazillion free “applets” that would do everything from editing your word files to brushing your teeth. Fourteen years later, the language is about as popular as PL/1. Now the rage is Google Apps. Presumably, everyone is going to spend the next several years migrating all of their personal data, under their control on low cost PCs that they own, to some privately help corporate storage mechanism that will charge them for the privilege, sell it back to them at a cost, and threaten to delete it and/or sell it to another company unless they pony up more money. The reality is that computing has as much chance of becoming a utility as private transportation does – a mathematical function that tends towards epsilon in the long run. And you can write off the Linux PC, it will never happen; no one has the time to learn how to rebuild a Kernel. Sure, there will be Linux embedded devices, from music players to digital VCRs, but the hub will always be Windows.
Meanwhile the PC has slowly been conquering the world, replacing your stereo system, your phone, your TV, and sometimes even your spouse.
The simple truth is that the PC is like the car, we are just at the beginning of the computer age. It’s a personal device that is liberating to the extreme. In ten years time, there will be three times as many of them, and 80% of them will be upgrades over the current installed base. People will keep on buying them to get faster graphics, more memory, better applications, quicker networks, and smaller form factors.
The PC is here to stay, and MSFT is a good buy. And in twenty years time Apple will be still be running those goofy adds comparing their high end systems (around 5% of the market) to the ones the rest of us buy at Walmart.
In the long run, there are only two consistent reliable shorts in this business: Apple and Google. If past performance is any predictor on future events, whatever short term technological leads these companies have today will be commoditized tomorrow. And the company that will do it will be Microsoft.
