Is This Really the Post-PC Era?

The latest introduction of iPad2 and the rise of the tablet PCs has prompted once again the proclamation that we are now in the Post-PC Era.  It seems we have been living in a Post-PC Era for about the last 15 years.  Every time there is an innovation in consumer electronics it is hailed as a major shift that will adversely impact the PC market.  First it was PDAs such as the Palm Pilot.  The cell phones and subsequently smart phones resulted in people sounding the death knell.  Today it is the iPad2 and tablet PCs.  If this is in fact the Post-PC Era, why did Apple introduce a high end MacBook notebook featuring Intel’s Thunderbolt last week?  This was announced just before the iPad2 launch.

I will contend a more correct description is the PC Enhancement Era.  All of these devices have grown and provided a larger TAM for the semiconductor market.  But the PC market continues to grow and is a huge market for semiconductors.  In 1996 the total PC market of desktops and notebooks was 78 million units.  By 2010, including netbooks, the PC market has grown to 328 million units.  This year that number is expected to reach 368 million.  This is happening even with tablet PCs growing to between 30 and 40 million units in 2011.

All these electronic devices work with a PC and enhance each other’s capabilities.  Until there is a major change to the iPad platform you need a PC to work with it.

I am a numbers guy.  I do look at the various market forces and trends, but ultimately the proof is in the numbers.  The SIA/WSTS Bluebook has been issued for January 2011.  This is an industry publication that tracks sales and shipments of semiconductors worldwide in specific product categories.  The SIA/WSTS reported data provides raw data, but combined with knowledge of end use markets and close discussions with key companies one is able to develop details for markets.

The January sales and shipment numbers for microprocessors was simply astounding.  Assuming the figures are not revised significantly at some point, the 1Q 2011 MPU shipments are trending to be a record quarter.  The historical trend for a “typical” year is for February to be slightly higher and March can be 50% higher or more than February.  Assuming more modest relative growth during 1Q 2011, the MPU unit shipments are headed for 13% sequential growth.  This almost never happens.  The 1Q shipments usually drop off from the 4Q of the prior year.

The computing market represents about 80% of the MPU units in the SIA/WSTS reported data.  This includes servers and workstations along with desktops, notebooks and netbooks.  However, the PC segment accounts for the bulk of the shipments.

Could this MPU growth be driven by the growth of tablet PCs?  One needs to understand what is behind the numbers in the SIA/WSTS reported data.  It is not as straightforward as you think.  The MPU category includes standard MPUs from Intel and AMD, including Atom.  It also includes various MPU families from Freescale, including the i.MX (ARM based) line.  There are other MPUs in small numbers from various chip vendors for non-computing applications.  The SoC devices, among them Qualcomm Snapdragon and Nvidia Tegra, are tracked in MOS Special Purpose Logic.  Apple’s A4 and A5 MPUs in the iPad, iPad2, and iPhone are internally developed and manufactured specifically for Apple.  Therefore, the Apple MPUs are not considered merchant market and are not counted anywhere in the SIA/WSTS reported data.

Undoubtedly, the tablet PC is a high growth market.  It is becoming more competitive as we have seen lately with the Motorola XOOM grabbing a great deal of attention as it goes up against the Apple iPad2.  But the MPU category does not track this.  If Intel gains a foothold in tablet PC with Atom, then it will start to influence the MPU category.

As it stands today, the numbers do not bear out the claim for a “Post-PC Era.”  Rather, what I see is an era of devices which offer more capabilities and connectivity that enhances the PC.  This is an era of more innovation but also continuing evolution of what we think of as computing.  What we think of separately as tablet PCs and “traditional” PCs may merge quickly.  There are several hybrid designs on the market today.  The idea of a “Post-PC Era” may become moot.  We may instead have a Post Modern Computing Era.  Whatever you want to call it, the semiconductor industry will be selling chips.

Tony Massimini

Chief of Technology

tonym@semico.com