The PC is passe

With Compaq Computer and Intel both reporting surprise business slowdowns in the past few weeks, the same old question is getting asked again: is the PC market stagnating?

The short answer is yes. The longer answer is, so what else is new?

The PC market has been stagnant as a platform for innovation for at least three years. What's kept it growing is A) a rapid and unexpected series of price drops that have made PCs more affordable to people who don't want to do much with them, and B) the fact that buying a PC is the most convenient way to connect to the Internet. But beyond that, PC sales have become less and less a meaningful indicator of the computer industry's health.

If you were focused on the PC market last year, for example, you would have missed the most remarkable PC story of 1997: the success of 3Com's little PalmPilot device. The PalmPilot now has more than a million rabid users, and it doesn't have an Intel chip.

The real action in the computer industry has shifted decidedly away from PCs and into mobile and networked devices. We may not call them network computers. We may call them cable boxes, pagers, handheld organisers, thermostats and telephones. But they are rapidly acquiring microprocessors and links to the Internet. This market segment is about to explode just as PCs become cheap commodities.

That's why Intel, Motorola and Microsoft are clambering into the market as fast as they can.

The PC is no longer a barometer of the computer industry's health. The action has moved to other platforms, where it will stay for a long time to come.

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