The smartphone category, in itself, has already gained traction. In fact, the mobile was originally thought of as a replacement to the computer before the tablet came in. Here, Google is again smiling all the way to the bank as Android-based smartphones with sales of 46.7 million units in the second quarter of 2011 and a market share of 43.4% (17.2% in Q2, 2010) totally eclipsed Nokia’s Symbian devices, which sold 23.85 million units and had a market share of 22.1% (40.9% in Q2, 2010). Apple’s iOS devices also increased share to 18.2% from 14.1% in the quarter (Gartner). RIM's share, meanwhile, has declined to around 12%. These figures mean gloom for Nokia, even though it still managed to be the largest individual smartphone vendor, as this is also not expected to continue for long. The hope for Nokia is the tie up with Microsoft, which has also missed the smartphone as well as tablet race. Its first Nokia Windows 7.5 Mango phone could launch in early November. But the already tepid response to Windows 7 (market share fell to 1.6% in Q2, 2011 compared to 4.9% for Q2, 2010) makes one wonder how far this will be able to disrupt the market. And if it doesn’t, Nokia and Microsoft both face clear and present danger.

The third trend that is expected to accelerate the PC’s downfall is the rise of the cloud computing phenomenon. Enterprises are increasingly getting hooked to the model wherein they can outsource their IT resources and save on costs. In an exclusive interaction, Kris Gopalakrishnan, Chairman, Infosys, told us, “One of our strategic priorities today is to look at new business and engagement models like cloud. Today the primary model is IT purchased as a capex, tomorrow it could be an opex expenditure.”

Cloud expenditure by organisations is expected to reach around $55.5 billion by 2014 as per IDC, a CAGR of 27.4% from 2009. Amazon Web Services has emerged as one of the leading providers along with Google and Microsoft Azure. Besides the PC market, this is a bigger threat to traditional infrastructure vendors like IBM, EMC, AT&T and HP. Verizon is also expecting to be a big name in this arena after its acquisition of Terremark. IBM has recently launched Infrastructure as a Service. Apple launched its cloud service for easy synchronization across Apple devices. There are also emerging providers like NephoScale, BlueLock, Rackspace, & Salesforce.com (whose CRM platform is considered a serious threat to Microsoft). VMWare, Cisco & EMC have specifically entered into a Virtual Computing Environment Alliance to sell VBlock Appliances based on Cisco’s UCS. A survey of 50 CIOs by Xantas revealed that while 23% of CIOs were using cloud, 90% had conducted feasibility studies and 53% planned to use it in the next 12 months. Security, the most common concern for cloud deployment had dropped to the fifth position in the list of reservations.

As far as the traditional PC players are concerned, HP’s plans to exit the segment may not be logical (the company is reconsidering it under new CEO Meg Whitman). It is best to continue investing in the PC market even as (and if) it goes into decline (like Lenovo and Dell are doing), occupy the market and milk its leadership and also seek to invest in the new growth engines or create disruptions in the market. It has lost the first charge in the emerging spaces. But it still isn't too late to join the party!