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My Apple iMac Is Starting to Look Like a Toaster


Computer sales are way down for a good reason: Value has shifted from the PC itself to what the PC can access.

This year, we've seen a constant stream of data supporting the notion that the personal computer business isn't what it used to be. Despite the release of Microsoft's (NASDAQ:MSFT) Windows 8 in October 2012, industry sales have been quite slow relative to 2009's Windows 7.

This week, Web analytics company StatCounter released Internet traffic share numbers.

Windows 8 currently drives 4.3% of Web traffic. At the equivalent point in its own lifetime, Windows 7 was pushing 13.5%!

Data like this (and there are multiple analytics companies issuing similar numbers) compounds the negativity spurred by releases from market research firms like IDC, which cut its first-quarter industry shipment forecast due to a slowdown in China.

And of course, the fourth quarter of 2012 was a major disappointment despite the release of Windows 8, with a 6.4% decrease in shipments.

During the fourth quarter of 2009, when Windows 7 was released, shipments were up over 15%!

So why isn't anyone buying new computers?

Do people not know that Windows 8 is out?

Or do they just not care?


To me, it's simple. Value has shifted from the PC itself to what the PC can access, meaning social media outlets like Facebook (NASDAQ:FB), Instagram, and Twitter, and content distribution services like Netflix (NASDAQ:NFLX) and Spotify.

There are equivalents in the corporate world. Many companies now use cloud-based offerings like Google (NASDAQ:GOOG) Apps and (NYSE:CRM) to run their businesses, which again, place value on the end service and not the computer that actually enables access to the service.

There are negatives to a cloud-based world. The primary one is that you're reliant upon major corporations safeguarding your stuff for long periods of time (or even forever). How many priceless baby pictures exist only on Facebook or Instagram? Probably quite a few.

However, this technological revolution is very convenient. It removes the burden of critical but annoying tasks like backups and library organization, and gets computers to act more like simple appliances -- like toasters. It also opens up technology to consumers with no interest in managing their devices.

Unfortunately, this trend, which I call "Toasterization," (see: The 'Toasterization' of the PC, and Why Things Really Are Different This Time) is a monumental disaster for those trying to make money by selling computers.

Think about it: If you can use any computer to listen to your music, watch your movies, and take care of your business, than pretty much any computer will do -- even an old one or a cheap one.

I have an Apple (NASDAQ:AAPL) iMac that I love, but if I didn't need it to process and manage my digital photo library, would I really value it?

Let's see.

How do I listen to music these days?

Well, I use Spotify -- even for music I actually own. In the 1990s, if I wanted to listen to music and wasn't near my computer, I'd have to burn CDs. But now, I can log in on any device -- my iPhone, my home computer, my work computer, my sister's iPad -- and listen.

Movies? There's Netflix Instant and Amazon (NASDAQ:AMZN) Prime.

Communications? I got Gmail, Facebook, Twitter, LinkedIn (NYSE:LNKD), and all that.

So I really don't need my computer to do most stuff; I can use any computer with a browser and working Internet access. That simple fact is a value destroyer because there's now little need to pay up for a computer unless you have some specialized need like video editing or audio engineering, especially with so many low-cost alternatives like tablets.

Heck, we live in an age where Google Chromebooks -- which at the outset looked like a goofy, Web-focused twist on the failed Netbook concept -- make sense and are actually selling well, despite having just a fraction of the functionality of traditional computers.

Why? Because they can cover the basics like email, Web browsing, and social media, which is what most people care about. And they're cheap as all get out.

Of course, the Toasterization movement is why we're seeing Microsoft and Intel (NASDAQ:INTC) plowing into the mobile space so aggressively. (See: Intel Has Beautiful Mobile Dreams, but I'm Going to Crush Them With My Eighth Grade Math Skills.) PC industry growth peaked years ago, but mobile gadgets are still evolving and have a ways to go before maturity hits them.

Twitter: @MichaelComeau

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Also see:

Apple's Stock Price Is Still Dropping (So Why Are You Still Interested?)

Why Apple's Reputation Depends on the iPhone 5S

Apple's Falling Stock Price, Sports' Real Heroes: The 'Butter Side Up' Theory at Work

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