PC Makers Wave the White Flag: You Win, iPad [Report]


Photo by leondel - http://flic.kr/p/9KEJTp
Photo by leondel - http://flic.kr/p/9KEJTp

High-profile PC makers such as HP and Dell may be preparing to “gradually phase out” of the tablet business, leaving the market to Apple’s iPad, Amazon’s Kindle Fire and Barnes and Noble’s Nook tablets. The rumored sea change follows the realization that best-selling tablets make money from the content they pump out, not from selling the hardware.

Taiwan-based DigiTimes cites unnamed “sources from upstream supply chain” that after unsuccessfully trying their hand at challenging Apple’s dominance, so-called ‘pure’ PC players will leave the tablet field to a small number of brands that can profit from a tight-knit content ecosystem. By focusing on selling content rather than hardware, firms such as Apple can earn revenue while offering devices costing as low as $99, as in the case of the Nook Simple Touch.

A number of PC makers have gotten into the tablet market only to fail miserably. HP’s TouchPad went down in flames only to be sold for $99 by retailers looking to rid their shelves of the slow-moving device. RIM’s PlayBook was met with a similar reception by consumers who seem only to want the look and feel of an iPad.

But what could put the nail in the coffin for PC makers’ foray into tablets is a belief the downward-spiraling prices are not about to end. According to the report, companies foresee a time when tablets will be free, completely removing the motive for firms built to sell hardware.

If the report is accurate, it would be the first move by PC makers that made any sense. Like someone rebounding from a broken relationship, computer makers latched onto the belief that tablets would save them from their stupidity over netbooks.

As we saw earlier this week with a steadily growing demand for Macs, the PC isn’t going anywhere. Although the U.S. and Europe may have a mature market ready for tablets, in Asia income is just now approaching where consumers can afford a PC. It was silly for PC makers to think tablets could totally replace worldwide demand for computers.

Our best lessons often come from failure. PC makers should learn from their failure with tablets to produce better computers than more markets will desire — and they can use Apple’s Mac as a template.