Are a Tablet and a PC the Same Thing?

Andrés is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.

Opinions seem to be polarized among those who think that tablets are effectively killing the PC and others who believe that they will never replace the good old computer. Looking at it more creatively, however, the distinction between the two product categories is becoming increasingly irrelevant.

Google and the Cloud

Google (NASDAQ: GOOG) launched its new Chromebook called Pixel last week, and It received some remarkably positive reviews by the specialized media. The computer runs on Chrome operating system, which is quite different to Windows or Mac OS, mostly because the only tool in the device is a web browser. The Chrome is designed so that users to do all their work and store all their files in the cloud.

Samsung and Acer had already delivered low-end Chromebook products in the past, but the Pixel is different in the sense that Google's new product can be considered a challenge for any high-end Windows PC or even the most powerful Macs.

Available in a Wi-Fi and a 4G LTE version, the Pixel is powered by an Intel Core i5 processor and has a 32-gigabyte solid-state drive (64GB for the LTE model). In addition to 4GB of DDR3 RAM, users will also get one terabyte of free storage on Google Drive for three years.

The Pixel has a resolution of 2,560 by 1,700 pixels at 239 pixels per inch (ppi). By comparison, the 13-inch MacBook Pro with Retina display has a resolution of 2,560 by 1,600 pixels at 227 ppi. In addition to extraordinary screen resolution, the new Chromebook has a touchscreen surface, which has been widely acclaimed by reviewers.

The biggest disadvantage is pricing: the Wi-Fi only Chromebook Pixel is available now for $1,299, while the Verizon LTE model will cost $1,449. That sounds like too much for a computer that works exclusively in the cloud, so the Pixel can hardly be expected to achieve big commercial success.

Google is most likely doing with Pixel the same thing it has done with Nexus in the smartphone business: setting the bar for production of Android smartphones by other manufacturers. The Pixel is probably intended as a marketing tool and as a guide for other hardware manufacturers, not so much as a profitable business line by itself.

Some analysts are wondering why Google has been building and promoting both operating systems – Android and Chrome – at the same time. But once you start considering touchscreen laptops and the rise of cloud computing, the lines become quite blurry.

The main point is that Google envisions the future of computing like a place where everything is in the cloud: all your files and programs become available everywhere and in every device, no matter if it’s a phone, tablet or laptop.

The Death -- or Mutation -- of the PC

If we look at PCs in a traditional way, things look quite dismal, and this is a big problem for Microsoft (NASDAQ: MSFT) and its hardware partners. PC sales have been in decline for several quarters, and the launch of Windows 8 did not have enough impact to reverse the trend: worldwide PC shipments totaled 89.8 million units in the fourth quarter of 2012, down 6.4% compared to the same quarter in 2011 according to IDC.

If we include tablets into that group, however, the trend looks radically different and Apple (NASDAQ: AAPL) comes out like the big winner thanks to the popularity of the iPad. This is what research firm Research firm Canalys does, and it has a much more positive vision about the PC market since it includes tablets sales in that category:

Worldwide PC shipments increased 12% year-on-year in Q4 2012 to reach 134.0 million units, with pads accounting for over a third. Apple continued to lead the PC market, shipping 27.0 million units and taking its share over 20% for the first time.

Should tablets be considered PCs? That depends on what kind of use each consumer gives to the device. They are perhaps better than PCs when it comes to content consumption, but for many productivity uses PCs are still irreplaceable. The trend is quite clear though: as tablets become more powerful and computing moves to the cloud, the lines will continue to blur.

The new 128 GB iPad and the Surface Pro can be considered examples of tablets approaching PC terrain, while phablets – big smartphones with a screen size somewhere between a regular smartphone and a small tablet – are hybrids between tablets and smartphones.

Bottom Line

Instead of seeing tablets and PCs like competitive products, maybe they should be considered complementary alternatives in a world in which we choose a smartphone, a tablet or a PC depending on our particular preferences, the specific circumstance and the task at hand.

The competition is not one of devices but one of ecosystems. Under that perspective, both Apple and Google look strongly positioned, while Microsoft needs to achieve some success in mobile if it wants to remain a relevant player in the future.

 


Andres Cardenal owns shares of Apple and Google. The Motley Fool recommends Apple and Google. The Motley Fool owns shares of Apple, Google, and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!

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