If Hewlett-Packard exits the PC business as planned, the U.S. is down to two major laptop makers, Dell and Apple. And the two couldn't be more different.
The Air is getting smaller (11.6 inches), lighter (2.3 pounds)--and, matched with OS X Lion, offers an iPad-like interface. The iPad, on the other hand, will evolve into a more upscale platform, replete with superhigh-resolution screens and quad-core processors. In short, Apple is serious about accelerating its transition to a Post-PC world. It's not just a Steve Jobs catchphrase.
Dell: Dell is a very different creature. It still markets a lot of low-end traditional laptops--just browse its Web site. Though Brian Gladden, Dell's chief financial officer, said during the company's recent earnings call that "we're...moving our product portfolio to higher value products while exiting lower margin products in retail business." That's been said before.
Whatever Dell does, however, consumers and businesses will continue to buy a lot of its PCs. The problem is, Dell may face the same existential quandary as HP if profit margins shrink too much. Apple is commanding healthy operating margins (around 30 percent), while Dell falls into the HP camp (usually around 7 percent).
So, who wins? That's up to the consumer, of course. Dell shipped about 10.6 million PCs worldwide in the second quarter. By traditional calculations, Apple shipped a fraction of that. But throw the iPad into the mix, and everything changes. DisplaySearch's figures for mobile shipments show that Apple wins handily, at about 13.5 million, in the second quarter.
That said, U.S. government accounts and Fortune 500 companies will need a traditional Wintel PC maker for the foreseeable future. So, Dell may benefit from HP's demise. Just think of all of those nervous Fortune 500 accounts wedded to HP and its business laptops.
So, one scenario is that Dell takes up HP's slack and Apple carves out more market share with the iPad. Maybe it's a win-win.