Interview, Podcast
a16z Podcast | So Where Are We on the 'S-curve' for PC Devices?
- The PC market is projected to enter a phase of significantly rising device prices with no expectation of cheap PCs, as the technology has reached the flat part of the S-curve where only sustaining innovations like thinner form factors and new ports are viable.
- While the PC curve remains flat, mobile innovation using ARM and touch interfaces is on an upward S-curve, with Apple holding 900 million iOS devices compared to 1.5 billion global PCs, though quarterly PC sales volumes remain comparable to mobile device sales.
- A fundamental transition is underway from keyboard-and-mouse interfaces to touch-based systems, a shift described as comparable to the move from mainframes to PCs, though software adoption in vertical sectors like real estate and dentistry is estimated to take approximately ten years.
- Microsoft is characterized as having missed the mobile transition defined by ARM and touch, instead attempting to add touch to legacy Windows systems like Windows 8, a strategy described as a reaction to missing the wave rather than a new innovation curve.
- Microsoft's Surface Pro and Studio products are viewed as optimizations for the mature PC curve, with the Studio priced between $4,000 and $5,000, targeting a niche audience of roughly 7 million Creative Cloud subscribers rather than the broader 1.5 billion PC user base.
- Apple's Touch Bar is described as an incremental evolution and a "super interesting" integration of an OLED screen and Apple Watch chip to manage friction, yet development guidelines explicitly advise against replacing core UIs or exposing functionality solely on the bar due to developer hesitation.
- The Android ecosystem faces severe fragmentation across 2,000 to 3,000 different devices, which hinders high-performance tasks, consistent updates, and VR support, prompting Google's entry into hardware via the Pixel to potentially fix reach and update issues.
- Google's hardware strategy risks creating an adversarial relationship with OEMs like Samsung and addresses a "reach problem" where press elites predominantly use iPhones, though the move to fix Android's fragmentation and VR support remains speculative regarding its ability to generate revenue lines with thinner hardware margins.
- The shift to mobile computing is driven by the fact that the average employee now spends less than half their time at a desk, with 25 million US salespeople conducting all work including email and CRM on phones, yet the workforce's broader needs do not require the specialized software features often touted for high-end PCs.
- The transition from x86 to ARM architecture represents a "step function discontinuity" involving power, sensor, and connectivity changes, but innovation is currently constrained by the "innovator's dilemma" where established players like Microsoft are reluctant to fully abandon their core PC business.
- Developers are hesitant to support new hardware features due to fragmentation and the lack of guaranteed updates across devices, leading to a "hopeless" effort to fix issues on devices that do not receive updates, while Apple's guidelines aim to constrain developers from attempting revolutionary UI changes.
- The market is approaching a state where cheap computing is only available via phones as the PC price floor rises, with the industry moving toward consolidation similar to Android's state 15 years ago, leaving "propeller plane" technologies optimized while "jet" technologies on mobile curves drive actual growth.