This is the first of four columns about an important transition taking place in personal computing that will, over the next 2-3 years, completely change this half-a-trillion dollar industry. We’ll use computing devices differently, the way we buy software will be completely changed, and device replacement cycles will be altered in ways that will hurt some vendors. It’s this last point where we begin. Personal computers and computing devices don’t become obsolete in quite the same ways they used to.
My three sons share an Apple iPad given to them by Mimi, their grandmother. When she bought it a couple years ago the iPad was top-of-the-line with 64 gigs and a Retina display. The boys run it hard on car trips where it functions as a hotspot and under covers in their bedrooms along with a couple iPhones, iPod Touches, various Kindles and some cheaper seven-inch Android tablets. In all we have probably a dozen touchscreen devices in the house but most of the action takes place on iPhones or that one iPad. Great for Apple, right? Not really. Apple’s iPad sales are flattening you see and the reason nobody seems to talk about is they don’t wear out.
The rule of thumb for personal computers is there is a new generation every 18 months and regular users aren’t willing to keep the same machine going for more than two generations, so our median PC replacement time is about three years. Mobile devices don’t typically last as long with manufacturers and carriers planning for a median 18 month replacement cycle. This is (or has been) in part driven by cellular contracts but battery longevity comes into it, too. And of course the state-of-the-art in mobile phones has been increasing so rapidly that 18 months is about right for everyone except me.
While a 10-inch iPad is more expensive than a high-end cellphone it isn’t dramatically so, especially with the decline of mobile contracts. Apple and the carriers originally expected iPads to last about as long as phones or maybe a little longer. But they don’t fail that quickly. At best (or worst depending who you are) iPads may follow a PC three-year replacement cycle. But they haven’t been around long enough to really test that so the big fear at Apple is they’ll last even longer than PCs.
My kids have never run out of memory with the iPad despite all the stuff they load on it. Battery life remains acceptable especially since they’ve learned to keep it plugged-in during long car rides sucking movies down from a Seagate Wireless Plus media server. Mama fills the Seagate box with movies grabbed from Netflix, keeping cellular data consumption to a minimum. Without the Seagate box my kids consume a gig of cellular data per kid per day, which staggers the old phone bill.
Wall Street has had some trouble understanding this phenomenon. Those investors who say Apple has reached its peak point to flattening iPad sales and the emerging Android tablet dominance. But this isn’t Apple failing or Google succeeding, it’s mainly products that are well made and last practically forever. Those who would blame Apple's high prices for the flattening are simply wrong. Only recently did the original iPad become incapable of being upgraded to the latest iOS version, for example. These original tablets still work fine with the old OS, though, and I have to guess that the software issue is mainly Apple trying to kill old hardware.
Apple still makes most of the money in tablets and that isn’t likely to change soon. What is likely to change — and with profound effect on the entire industry — is how we’ll run applications on these devices. You can read about that tomorrow.
