A tiny Austin, Texas, startup is about to get some backup from Hewlett Packard in its David-and-Goliath fight against Intel.

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A tiny Austin, Texas, startup is about to get some backup from Hewlett Packard in its David-and-Goliath fight against Intel.

Wired Top Stories

For nearly 30 years, personal computers as we have known them have been the drivers of the technology engine. From Intel to Microsoft to Dell to HP to Micron Technology — many fortunes were made on the back of the PC. But the rise of mobile computing is upending the technology business and is simultaneously redefining what is a personal computer and how we use it.

On Thursday Hewlett-Packard, one of the oldest companies in Silicon Valley with deep connections to the PC ecosystem (they paid billion for Compaq in 2002) and the world’s largest seller of PCs, confirmed it is looking to sell off its personal computing business. It’s also getting out of the hardware game altogether, ditching its tablet and smartphone operations too. But if HP does eventually find a buyer for its PC division, it will only be catching up with IBM, which in 2004 decided that the low-margin PC business wasn’t worth pursuing.

HP is not the only company that is finding itself on the wrong side of PC history. Earlier this week Dell reported its earnings and acknowledged that its bread-and-butter PC business isn’t what it used to be.

But it’s not just those two. Annual growth rates for the PC industry as a whole have been shrinking in recent years, with small single-digit rates of growth. It can’t be inspiring for the manufacturers looking at their balance sheets.

Those companies looking to innovate won’t find much interesting about building PCs anymore either. Laptops will get faster processors, and marginally thinner. HP and Dell, along with the other top PC companies by volume (Acer, Lenovo and Toshiba) build essentially the same computer, with the same software, chips, and hardware. The only thing to scrap over is minor design flourishes and who can price theirs the cheapest–not exactly an inspiring business if you’re interested in being a part of mainstream personal computing advances. Or, for that matter, growth that will boost your stock and keep investors happy.

Meanwhile, the rise of alternatives to traditional PCs, tablets, continues its march on. UBS recently upgraded its already-optimistic tablet forecast for this year, to 60 million tablets from 55 million, and next year, to 90 million units from 80 million. And it’s not just shipments. People are buying them.

We’re not looking at a complete takeover of PCs by tablets. There will still be several hundred million PCs sold worldwide for several years because people will still need PCs for certain tasks. But it’s very clear that many of the habits we associate with personal computers can be carried out with a decent-sized touchscreen and a good internet connection. And better yet, done anywhere, and quickly.

Before all of these signs became unavoidably obvious, the other original PC company was the only one that saw the end of this era coming and actually did something about it: Apple.

Over a year ago, Apple CEO Steve Jobs started heralding the end of the dominance of the PC, dubbing it the post-PC era. He compared PCs to special-use vehicles in June 2010:

“When we were an agrarian nation, all cars were trucks because that’s what you needed on the farms.” Cars became more popular as cities rose, and things like power steering and automatic transmission became popular.

“PCs are going to be like trucks,” Jobs said. “They are still going to be around.” However, he said, only “one out of x people will need them.”

Not coincidentally, this foretelling of “the post-PC era” occurred after the introduction of the original iPad. Jobs saw the device as the future of personal computing, while critics and skeptics saw it as little more than “a big-screen iPod touch.”

Nineteen months later, we see what the iPad has wrought: the iPad is a blockbuster hit (Apple’s sold 9 million this year, and 15 million all of last year), and has sent PC makers much larger than itself scrambling to come up with a response. Meawhile, PC profits remain low, and even the world’s leader in sales  is disinterested in continuing the slog.

So while the era of the primacy of personal computers in their traditional form is fading, they are not disappearing entirely. They’re just taking on a different form.

Thumbnail courtesy of Flickr user Kıvanç Niş. HP laptop image courtesty of by treehead.

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Chinese telecommunications equipment vendor Huawei has plans to invade the enterprise IT market, according to a research note out this morning from Deutsche Bank. An analyst at the firm expects the company to introduce a line of servers, low-end switches, security, VoIP and storage products designed for the enterprise before the end of this year. Huawei recently reported billion in revenue from the enterprise and organized the company into three operating segments: carrier, enterprise and devices.

The shift to enterprise sales isn’t as tremendous as it may seem, given Huawei already makes much of this type of gear for service providers to support their networks. Deutsche Bank says it’s one of the largest customers of Intel already, and it’s a huge storage player thanks to its telecom contracts. It plans to release a lighter, scaled-down version of the gear would be appropriate for the enterprise which could cause problems for Netgear, Cicso’s low-end switching business and perhaps even Dell or Hewlett-Packard. From the note:

In our conversations with the industry, we have found that most companies seem to be dismissing this opportunity, seeing Huawei as low-end gear, or an emerging market phenomenon with no footprint in enterprise hardware. We think this is the same attitude many telecom equipment makers had ten years ago, and that it would be a mistake to take Huawei’s initiatives lightly. At the very least, their entry into enterprise hardware market could bring increased pricing pressure. However, it will likely take two to three years before they can fully deliver their planned product line.

We’ve paid attention to Huawei’s rise for years, and the company has certainly made important hires and built a big enough business that it could become a credible threat in the enterprise IT industry, causing pricing competition as well as providing new innovations. Huawei’s gear in the telecom side may have started out as low-cost, but it’s currently delivering some advanced technology such as 1.2 Gbps wireless for Verizon. To count it out as it enters the enterprise seems like hubris.

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