by Tyler Cowen
on January 21, 2012 at 2:14 pm
1. The rise and fall of personal computing.
2. How well has Japan really been doing?
3. Is health care spending finally under control?
4. How to dominate a metro station.
5. A conspiracy theory about how timeline is so bad.
6. My 2006 post on whether future generations pay for deficits.
I notice a Karl Smith commented on your 2006 post! The same Karl Smith of modeledbehavior?
The first MB post from Karl was Nov 20 2006. And the link from the MR comment does go to a North Carolina page.
1. Great chart, but note that almost nobody owns an iPad or iPhone without also owning a PC or Mac. The two types of devices are complements, not substitutes. Tablets and smart phones are lousy computers, and computers are lousy browsers and phones.
The slowing growth in PC sales can be attributed to the fact that computers are somewhat durable – durable in the sense that the benefits of their computing power withstands time. Ten years ago, computing power was far less “durable” because processing speeds and memory capacity were rising so quickly and the software demands were exploding. However, a 2 GHz dual core processor with 4GB of RAM and a 500 GB hard drive that you bought two years ago is good enough to carry you for a while without upgrading to an i5 or i7 with 8GB of RAM and 1TB of hard drive. I believe the increasing demands of software have slowed.
Indeed, the latest innovation of PCs are the lightweight ultrabooks. But these have the same i5 and i7 processors that conventional laptops had one year ago, and their solid state drives are only a fraction of the capacity of older hard drives.
I predict tablet sales will increase for a while but, as soon as most people have one, sales will drop precipitously. I don’t see much room for innovation in the tablet arena. As soon as competition is freed from the logjam of patent lawsuits, competition between tablets will segment the market between size and type of operating system.
” computers are lousy browsers ”
I disagree. I bet people are more efficient browsing at a computer than any tablet. Does dragging a finger across 9 inches of Gorilla-glass beat a mouse or track-pad? Can readability / information density of a tablet compete against a 17 inch screen?
Would you be willing to accept “lousy keyboards?”
An average person gets about 40 words-per-minute on a conventional keyboard. What’s the statistic on a Ipad I wonder? I suspect slower.
I’m sure it’s generational.
No I can’t stand those touch screen keyboards – I’m in that younger generational age group and I don’t understand how anyone can use them as effectively as a keyboard.
Let’s just say if I were forced to use a tablet all the time, I wouldn’t be commenting much around here
No disagreement from me there, but John Personna has a point. I saw a young woman at an Apple store typing so quickly on her phone without error, it astounded me. I’ve had my Touchscreen phone for several months and I’m a poor typist on it. I type close to 70 wpm on a standard keyboard without error.
I think if we took up a collection here, we could get you a tablet. 🙂
It’s not even about the average, the potential ceiling is more important. And traditional keyboards completely destroy anything else in that category. A skilled typist can reach 100wpm with very few errors easily.
By browse I literally mean browse, i.e. shopping, reading books or articles, looking at photos.
If you’re idea of “browse” is to type comments longer than a few words, then computers are superior. if you’re not doing much typing, then the keyboard, battery, and optical drive are cumbersome.
Bear in mind that people who own both a laptop/desktop and a tablet have a choice of using either. If the laptop were the superior browser, then there would be almost no market for a tablet. Correct?
Can readability / information density of a tablet compete against a 17 inch screen?
Then why aren’t most books 17″ wide?
Have you tried “curling up” with a coffee table book?
I accept your disagreement for the distinctions you cite, but I stand on my general point.
It is precisely when mobility and size are factored in that tablets win; no arguments about that. The keyboard-mouse model was overturned not because it was inefficient but because it got in the way of curling on the couch. Ergo, I think tablets and PC’s will remain separate niches and we’ll still continue to use PC’s (or laptops) in fixed-location “serious” uses where efficiency is at a premium.
So let me retract my word “browsing” and substitute “whatever the heck people are doing when they use a tablet.” 🙂
Then we’re in total agreement.
I don’t see them as separate niches as much as complements. There aren’t too many people who own a tablet who don’t have a computer. Someone with a computer can get by without a tablet, but the rise of the smartphone demonstrates the desire for portable browsing and web communication. The Kindle and other e-book readers demonstrate that there is a diversity of size preferences somewhere between a 3″ smartphone and a 10″ iPad for basic reading and web browsing without the need for too many keyboard inputs. In fact, the character limit on Twitter and texts probably reflect the medium on which they are normally displayed as much as the bandwidth limitations.
I own a desktop, laptop, tablet, Kindle, and smartphone. They all have their uses.
Your conclusion and mine are the same – the PC isn’t going anywhere. I just believe that smartphones and tablets will reach some critical proportion of PC users and then sales will flatten out just the same as PCs.
Then why aren’t most books 17″ wide?
Dot pitch! A professionally printed book is around 400 dots-per-inch. An Ipad just 150.
My point is that there is a tradeoff between readability and portability, and the equilibrium is subject to personal preference. The Kindle is preferred to the iPad by some for the ease of reading.
A tablet complements a laptop/desktop because it gives you more choices.
Computers more or less stopped getting faster in 2005. They’ve continued to get better graphics, and to add cores, but that benefits specific things, not the general case.
They most definitely have been getting faster. The technology has moved away from higher clock speeds (Ghz) being the be-all-end-all of faster, and adding cores is part of that. The newer chips are much faster in terms of just about any computing task though. See e.g.: http://www.anandtech.com/bench/Product/93?vs=288 – the Pentium 995 is from 2005, and despite running at a higher clock speed loses in every benchmark to the I5-2500 from last year.
The real question is MIPS/$, which has been getting better. Adding cores/GPUs is okay as long as they get cheaper.
1. Projecting the trajectory for tablets using the iPad is like projecting the trajectory for hybrids using the Prius. I’ll see it as more of a niche when somebody sells a lot other than Apple.
About #3, Uwe Reinhardt notes that most people probably don’t feel that out-of-pocket health care costs have decreased as slowly as they have (and decreased as a percentage of costs). One reason that he omits is that the definition of out-of-pocket used in the statistics he discusses is to the final provider; i.e., it doesn’t include insurance premiums. (And then there’s the portion of premiums paid by employers in an invisible manner that doesn’t show up on the pay stub.)
Many of the “insurance premiums” cover predictable costs, and end up being somewhat like out-of-pocket costs, though they’re closer to membership in a discounted supper club with free coupons.
1. It seems silly to include iPads in these sorts of graphs, but then leave out game consoles, Kindle and other eReaders, and the like (and while we are at it why not DVR’s?).
Some quick googling tells me that 11.2 million iPads vs 8.2 million Xbox 360’s shipped last quarter. The Nintendo DS has sold 149 million units. It’s not as if the iPad is the first locked-down-psuedo-computer-media-consumption-device to sell in large numbers.
Although I would not consider iPads in the same class as PCs, they are general computing devices. Game consoles, e-readers, and DVRs do not have that same functionality. PC’s have been much too powerful for the vast majority of use cases, so it’s no surprise that they are losing now that cheaper, more portable computing devices are available. Expect this process to continue for some time. I worry that PCs will return to being grossly expensive for the average hobbyist once all is said and done. There are markets in that shift I will welcome with open arms.
I’m curious what your definition of “general computing device” is. Let’s compare the iPad and the Xbox 360:
– Built from slightly customized commodity hardware
– Runs on a stripped down, modified version of OS X
– Will only run software approved by Apple
– Built from slightly customized commodity hardware
– Runs on a stripped down, modified version of Windows
– Will only run software approved by Microsoft
The only difference I see is that MS is more restrictive of what software they allow (although they do have an indie channel that allows you to sell games that MS doesn’t have a say in). And the iPad has a web browser. But then the PS3 has one. And, the PS3 originally allowed you to install linux!
The Xbox360 and PS3 are gaming consoles. They are computers built for a specific function. It’s true that they are becoming increasingly functional, but to use general computing applications, such as a calculator, notepad, or word processor is not as simple as installing an application. Loading Linux onto a PS3 converts the hardware into a general purpose computer, no longer being a PS3. A computer is not it’s hardware, nor it’s IO devices, nor it’s OS, nor the software run on top. It is all these systems combined into one. For a machine to be general purpose, it must allow any computational task to run, without lock-down (at any level) to specific functionality.
Yes, you could, today, write any one of those those programs and run them on an Xbox. And you could release them on the indie games channel. I don’t know why you would though.
You can not however, run any application on an iPad that is not approved by Apple. Every piece of code running on an iPad has been checked and approved by the App Store verification process. There is no other way to run an application without rooting your phone. If that is not lock-down, I don’t know what is.
My understanding is that XBox Live Indie Channel games require approval.
In any event, using app store approval as a reason to say that an XBox is more a general-purpose computer than an iPad is silly. I do nearly everything on my iPad, from administering remote servers (via SSH and screen-sharing) to creating documents to playing games to listening to music to reading books to email. I even code on it (in Pixie Scheme).
On my PS3, I play games.
The lived experience of an iPad is of a general-purpose computer, and this trumps theory. An iPad is much more similar to a traditional computer than to anything else. I think counting smartphones and tablets in the same general category as PCs makes sense since these devices, over the next few years, will either replace (or be purchased instead of) PCs for large numbers of people, perhaps the majority of users worldwide.
#2 That’s depressing, what terrible fortune to befall such a great country
Which country? 🙂
1. Macs != personal computing?
Not to dismiss the rise of the supplemental tablets and phones, but the
beautifully flattening half curve of the PC would be less flat if it was “Mac + PC”
PC != personal computing either. PC is the label given to any machine compatible with the original IBM PC specification, using an x86 processor variant and probably sold with a version of DOS/Windows. PC as an acronym hasn’t been valid for at least a decade. Even with Mac’s move to intel chips, it is still different enough that it does not meet spec.
That all said, the author is clearly not speaking to the computer industry. Saying that Microsoft dominated the PC market misses so much of the conversation. Microsoft does not produce cpus, chipsets, or almost any hardware. It would have been just as valid to claim that Intel dominates the PC market, or that a collection of Taiwanese chipset makers dominate the PC market. And no one in the computing industry seriously believes that PCs will be in every home for much longer. Hence why Windows 8 is focusing on it’s tablet and phone capabilities, and the IPhone vs Android debate is raging. Happily for me, the “Year of Linux” has finally come thanks to Android.
Good points. But as far as Linux is concerned… why shouldn’t be counting the world’s servers in all of this 🙂
Be careful – that chart has a logarithmic scale on the y-axis. The combination of Mac + PC is less flattening, but not as less flattening as you think.
Why shouldn’t we believe the PC curve is flattening? Nearly everyone has a PC or Mac and they last more than a few years. The tablet curve is bound to flatten too.
Ah, should have noted the log. Thanks!
#4 – It’s the same at Westminster tube station in London, there are plenty of ads aimed exclusively at policymakers.
#2 – I agree with the author’s observation that most of the foreigners who pontificate on Japan never leave the immediate vicinity of their central Tokyo hotels, and assume that the rest of the country is the same as those few blocks.
#3: Uwe is a good and smart man. That post is not helpful.
6. Sometimes future generations benefit from today’s spending, even if we don’t spend it on bridges. By spending freely today on iPhones and iPads, we ensured that this new product category established itself instead of being a flop like the Segway, and bequeathed to the future a new golden age of mobile computing. Sometimes consumer debt binges are essential for progress. I wonder if the coming age of austerity will strangle some useful innovations in the crib.
So, if only more people had spent on a Segway……
OK, I admit that was a poor counterexample. It was just the first thing that came to mind under the “flop” category.
The main problem with the Segway was that they priced it like a car when they should have priced it like a bicycle. It was a recreational vehicle unsuitable for commuting in inclement weather or for carrying so much as a suitcase. It was doomed regardless.
How about Babbage’s Analytical Engine and the golden age of steampunk that never was? Although there the bottleneck was venture capital rather than consumer reticence.
Or maybe Second Life’s failure (actually, it’s still around) is delaying us from fulfilling our virtual-world rabbit-hole Fermi-paradoxical destiny…
Given the aging population, a Segway might just turn out to be our greatest contribution to them.
Frail older people already have those mobility scooters. If they can’t remain standing upright for long or keep their balance, a Segway isn’t really suitable. And Segways can’t carry cargo, like groceries.
In the great “Do future generations bear our debts as a burden?” debate, people like Krugman made an assumption that the future Americans can simply redistribute the burden so that the bondholders or the taxpayers don’t hold a net burden- this was the point behind the phrase “we owe it to ourselves”. However, this was the part that was, in fact, wrong. That life-time burden cannot ever be rectified if taxes are ever levied to pay off the bonds, or inflation is used to devalue them, or they are defaulted upon- there must be net losers at that time, and net winners, but some of the winners will be amongst the oldest, or already dead at time. The only way this isn’t true is if all the bonds are bequeathed generation to generation down through time. If any passing generation is selling some of the bonds to younger ones in order to consume before end of life (certainly the reality), then some future generation will have forgone consumption (by buying the bonds when younger) that cannot be completely replaced later in their life by any means without making some other generation then or later worse off.
#4: “Just about the only disadvantage of Capitol South (from the protestor point of view) is that it’s not a physically big area; you can’t fit more than a few dozen protestors in there before it becomes a complete mess.”
This is NOT a disadvantage. Having a small group of protesters able to dominate is a huge logistical plus to organizers trying to look big.
Years ago, I had a window office in the Marquette Building, overlooking the Calder in Federal Plaza in Chicago. [ http://www.gogobot.com/alexander_calder_flamingo_scul-chicago-attraction ] This is a large plaza, which made most protests look small, but if you are protesting the federal government this is the place to do it. I watched listless milling around until the TV cameras came, then enthusiasm and the desire to look like the biggest possible crowd, then more listless milling after the TV trucks left.
Isn’t there some kind of strange distributional effect going on with the debt issue, i.e. we are reallocating resources from future taxpayers to the heirs of present bond buyers?
I see two large issues here: not all taxpayers are equal, and public debt is not the same as private debt. I can turn down the estate in the case of private debt. The same is not true of public debt. What difference exactly that produces I am not sure however.
Yes, there is a distributional effect, but that effect cannot be rebalanced by redistribution at any time t2 in the future. The simple reason is that past events in this case cannot be undone- a bond buyer taxed along with everyone else to pay off his/her bond, or seeing the bond eaten by inflation or default, will have already foregone a portion of his lifetime consumption by time t2. His/her lifetime consumption can then only be made whole by making someone else, who did not buy the bonds, worse off at that time going forward.
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