Smartphones and PCs

There was recent big news that shipments of smartphones passed PCs. So while I don’t believe the PC is dying, I do believe there is a message here. The volumes were interesting too. Smart phone volumes topped 100m units for the first time, while PC units were a still respectable 92m units.

So is that the death of the PC? It is true PC shipment growth has slowed in terms of the past, but it still shows respectable growth. IDC stated shipments were 346.2m units in 2010, a 13% growth factor. Overall growth from 2010-2015 is expected to grow 6%, as per IDG . That growth curve yields roughly 450m units in 2015 for the PC market. Any more growth, and 500m units is possible. A market that is 500m units is not a small market. PCs are a valuable tool for many businesses and many people. And it looks very likely to stay that way. What is more possible in the PC market is the pressure on desktop sales as laptops (and net books) become powerful enough for many “knowledge workers”. That puts pressure on ASPs for the silicon manufacturers and on design teams, but doesn’t change the fact that there is a bit market out there.

What we are seeing, then,in my opinion isn’t the death of the PC. It’s the emergence of something new.

Cell phones aren’t new. And smart phones aren’t particularly new. But the level of experience Apple brought to the market with the iPhone, and the integration of services in iOS and the SDK provided to developers are new, as is the idea of a central shopping place for customers in the app stores. And Google’s response with Android created a market stratification similar to what existed in the PC market years ago. Apple took their usual path and created a controlled, garden and closed market. Google took the Microsoft path with their uncontrolled and somewhat chaotic open market. The space Google carved out in the mobile market is the space that used to be owned by Microsoft. It took Microsoft 3 years to respond, and Windows Phone 7 was a worthy response, but it remains to be seen if there can be 2 or more players in either the closed or open markets.

That feels new to me. And the level of experience has energized the smart phone market. It used to be that smartphones were 10% or so of the market. In 2008, in Q2 smart phone sales were 32.2m units, with total sales of 139m units. In 2009, they were 17%, roughly 170m units of smart phones out of roughly 1b total units. Thats 50% growth. Last year, they were roughly 20%, about 350m units so smartphone sales almost doubled last year. Streaming and location services are offering personalized services like never before. With streaming services like Pandora and Last.fm, you can get a personalized music stream on your device, whenever you want. With location-based services you can get turn-by-turn navigation for car travel and unique services like applications that use your GPS location and geo-tagged businesses to tell you what bars, restaurants, cultural, or entertainment venues are near you when you walk around. These types of services are new things that were not offered so easily to the masses in the past, and the level of convenience they provide is part of that new experience. And those aren’t the only ones, just two quick examples.

These examples speak to part of the integration of services in the smart phone operating systems, as well as how well they are exposed to developers in the device SDKs. And the idea of an “app store” where the platform owner provides a built-in ecosystem to reach the consumer is also very new. So in a extremely rapid manner, developer ecosystems have sprung up. Having started Windows programming in 1987 with Windows 1.03 and having lived through how long it took both the Mac and Windows ecosystems to become well-formed – this is unusually fast.

So I am sure some of you out there are asking yourselves “very interesting Phil but what does this have to do with gaming and graphics samples from Intel?”.

Now, maybe not so much. But over time, quite a bit. Intel is investing heavily in Atom to have a part that is able to address that market. And over time, Atom will be refined to hit the mark. It is already starting to reach where it needs to be, and the design wins that are starting to appear are an existence proof of that.

And over time you can expect to see that focus be reflected in the gaming and graphics samples. First, we need to take care of home base, the PC. And this first year you can expect that to be our target. Over time, though, it should not be unexpected to see this team “dip their toes” in the Atom/device space and as that space becomes an increasingly important market to Intel that the gaming and graphics samples would adjust to include that space as a target.

How fast and how much, it is too early to talk to. But over time adding this space should not be a surprise.

I’d be interested in hearing in the comments what sort of samples developers feel would be helpful in that space. While this isn’t a commitment to implement what we hear in any dialog, it is always good to listen to the customer. And don’t be afraid of radical suggestions. For instance, would standardizing on OpenGL-ES even on the desktop be useful, since that is the standard for devices? OpenGL-ES 1 or 2? How important do developers feel WebGL samples be in 3 years? These are the sorts of discussions I would love to have.
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