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Microsoft CEO: Mobile devices are PCs too

At last week?s D8 conference, Microsoft CEO Steve Ballmer said that mobile devices such as tablets are under the same umbrella as PCs?all of them are computing devices, just with different form factors.

The comment was in response to Apple CEO Steve Jobs? ?PCs are going to be like trucks? remark the day before, an analogy illustrating the ongoing shift away from desktop computers toward mobile devices. Mr. Ballmer seemed to suggest that smartphones, tablets, netbooks, laptops and desktop computers are all PCs in one way, shape or form.

?I think people are going to be using PCs in greater and great numbers for many years to come,? Mr. Ballmer said. ?I think that PCs are going to continue to shift in form factor?PCs will look different next year, the year after that and the year after that.

?The real question is, ?What is a PC??? he said. ?Nothing people do on a PC will be less relevant tomorrow?there are usage cases whether on PCs or alternate devices that will grow in popularity, particularly entertainment scenarios.

?I think there will be a general-purpose device that does everything you want, and there will be specialty devices?the PC as we know it will continue to morph form factors.?

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Blurring lines between mobile device and PC
Is this just a semantic argument? Does a rose by any other name smell as sweet?

And what are the stakes for marketers, advertisers, merchants and content providers?

Some analysts believe that blurring the lines between mobile and desktop is not necessarily a bad thing for marketers?possibly quite the contrary.

?Not focusing on semantics, one could say that every computing device is gradually becoming a PC in the sense that capabilities are blending together,? said Alex Spektor, Boston-based analyst of wireless devices at Strategy Analytics. ?The advent of the smartphone has given handsets the capability to browse the same Web as PCs and to run applications that do a lot of what PCs do.

?In many ways, smartphones are mobile computers, and they have the added advantage of always being with their owner, thus providing not just convenience but also additional capabilities, such as location-based applications and services,? he said.

Tablets, MIDs, netbooks and other devices also represent the emerging devices that provide PC-like capabilities in mobile or portable form-factors.

?As software and hardware evolve, we expect device makers to leverage common user experiences across devices, so that consumer access to the Web and Web-based services is enabled and facilitated by the device and not limited by the form-factor to the extent possible,? Mr. Spektor said.
 
?The implication for marketing folks is that in the consumer's eye, there will not be one type of device?the standalone PC?that accesses the Internet and Web-based services and applications,? he said. ?All devices are becoming gateways to the same capabilities, just optimized for the particular use case.

?The advertiser's opportunity to promote products and services becomes broader as a result.?

Steve versus Steve
So whose side holds water? Who is right? Steve Ballmer or Steve Jobs?

?The discussion between [Mr.] Jobs and [Mr.] Ballmer is very relevant, but it is partly a disagreement about semantics,? said Sarah Rotman Epps, analyst of consumer product strategy at Forrester Research Inc., Cambridge, MA. ?[Mr.] Ballmer is not saying something fundamentally different than [Mr.] Jobs.?

In essence, Mr. Jobs is saying that he does not consider a tablet to be a PC, while Mr. Ballmer is saying that he does.

?We at Forrester agree with Mr. Ballmer that the tablet is another form of a PC,? Ms. Epps said. ?Computing has moved beyond the traditional PC.?

In a new forecast of PC sales over the next five years, Forrester found that the PC market overall is growing.

Looking at consumer PC sales in the U.S., the only form factor that will shrink over the next five years is desktop computers, but even desktop PCs will stay relevant, with gaming and 3D buoying sales of desktops, according to Forrester.

?We see the desktop being complemented by multiple portable PCs within a single household,? Ms. Epps said. ?Consumers will own desktops just as they do now, but also smartphones, tablets, netbooks and laptops.

?There are different use cases for each device, but they are all fundamentally computing devices,? she said.

Overall, Forrester predicts that the PC market will grow by 50 percent from 2010 to 2015.

The firm forecasts that 56 million smartphone units will be sold in 2010, and that number will grow to 64 million in 2015.

?Growth of PC sales will definitely start to slow by 2012 and beyond but it will still be a signficant market,? Ms. Epps said.

?There will be more than three times as many smartphones in 2015 as tablets?there will be a huge growth in tablets, it is the fastest growing category, but there will be many more smartphones sold than tablets,? she said.

Forrester predicts that 20 million tablets will be sold in 2015 in the U.S., representing 23 percent of the PC market in 2015.

But why should marketers care?

?The implication for content providers and advertisers is that you need to reach consumers on all devices, on all platforms,? Ms. Epps said. ?We see the app growing in importance, not just apps for smartphones and tablets but also for traditional PCs.?

For example, the Barnes & Noble eReader application is available for iPhone, iPad, BlackBerry and desktop computers, and the company has surpassed 1 million downloads on PCs.

Then there is Twitter, which is a cloud-based service but consumers still use applications such as Tweet Deck to manage their Twitter feeds while they are at their PCs.

Meanwhile, Google announced that it will launch an applications store for its Chrome browser.

?Marketers and publishers would be wise to start thinking about apps more broadly than just for smartphones,? Ms. Epps said. ?There?s the opportunity of reaching consumers through apps on devices other than just smartphones.

?[Mr.] Jobs commented that he sees the PC going the way of the farm truck, but we see significant growth in the PC market over the next five years, although the definition of what is considered a PC is expanding,? she said.

Mobile is growing fast but PCs are not dead yet
From smartphones and tablets to netbooks, laptops and desktops, computing devices are multiplying at a dizzying pace. Each form factor has its own set of unique use cases.

?As great as the PC is, it is a great general purpose device, there is a lot of overhead and it can be difficult to use?not everyone needs that level of complexity, Stephen Baker, Herndon, VA-based vice president of industry analysis at the NPD Group. ?Netbooks opened up people?s eyes.

?There are opportunities for more limited-functionality devices for people to use for certain purposes such as Web surfing and content consumption on the iPad and other tablets, devices that do specific things for people,? he said. ?I agree with [Mr.] Ballmer, it doesn?t change role of PC, but there is room for other untethered mobile devices in that infrastructure.

?Mobile device are going to have a place to play in how you offer people social networking and shopping experiences as adjuncts to the PC as all part of that infrastructure.?

At the end of the day, brands want to reach consumers on any and all screens that consumers are using. As always, they will follow the eyeballs.

?You don?t have to pit one product against the other?there is room enough for various use cases,? Mr. Baker said. ?It offers retailers and advertisers an awful lot of devices on which to reach consumers.

?Mobile devices can reach consumers wherever they are, in a restaurant, on the street, in a store or in their home,? he said.

Here is a video clip of the conversation with Mr. Ballmer at the D8 conference: