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That PC You're Using Is a Dinosaur

HP, the world's largest computer-maker, wants to exit a dying business.

That personal computer you're using to read this is a dinosaur, even if you bought it yesterday.

Who says? Only Hewlett-Packard, the world's largest maker of PCs, which casually mentioned last week that it wants to walk away from the business after sinking billions into it over the past decade.

It seems PCs just aren't sexy anymore, as if they ever were. Everyone wants a smartphone or a tablet. The new emphasis is on computing, not computers.

The family PC used to be the one device for entertainment and communicating on the Net, maybe even playing games.

Now—and you can largely thank Apple's Steve Jobs for this—you've got your iPhone and your iPad, and the Android equivalents. As for games, they're a lot more fun on a networked xBox 360 or PS3 or Wii, hooked up to big-screen TV and playing your friends online. Or maybe you just want to play on your smartphone while on the run.

Face it, the PC is dead. We're entering the Post-PC era, and HP is trying to get out while the getting is still good.

The company spent $1.2 billion on Palm Inc. last year, in large part to get a head start in the tablet business by developing Palm's webOS operating system to compete with Apple's iPad. But HP pulled the plug on its new line of TouchPads last week after a miserable few weeks on the market, and slashed prices to 80 percent off on the remaining stock over the weekend.

The company also said it was dropping its line of phones carried over from Palm, including a new smartphone that had been on the market for just days.

HP had seen the writing on the wall for PCs, and had tried desperately to get into the tablet market. But by the time the TouchPad was introduced, the iPad was just too dominant, and Android tablets were gaining traction for whatever was left of the market. The same was true for smartphones, with Apple's iPhone and Android phones taking the lion's share. It was too late for HP.

“Consumers are changing the use of their PC,” said HP CEO Leo Apotheker, stating the obvious.

“The tablet effect is real, and sales of the TouchPad are not meeting our expectations. The velocity of change in the personal device marketplace continues to increase as the competitive landscape is growing increasingly more complex, especially around the personal computing arena.”

So HP, which sold one out of every five PCs purchased worldwide last year, wants to throw in the towel on its Personal Systems Group and hopefully find a buyer, like IBM did with its PC division in 2005 when it sold it to Lenovo, a Chinese company.

IBM decided to emphasize enterprise computing, selling products and services for businesses, not consumers. Now HP looks to do the same: It also announced last week it was spending $10.3 billion to buy Autonomy, a British company that makes software that allows businesses to organize and retrieve email, documents and other media.

When HP gets out of the consumer PC business, that will leave just two large American companies in the market: Dell and Apple.

Some might think HP is foolish, having sunk $25 billion into Compaq a decade ago to gain its dominant position in the PC business. But who knew? Who knew when Apple CEO Steve Jobs stood on a stage in January 2007 to show off the first iPhone that it would be the PC's kryptonite?

The PC isn't dead yet, just dying. In fact sales are expected to grow by 4 percent this year. But at the same time, tablet sales are doubling, and most of the PC growth occurred at Apple.

 "It's very different from where the business was going 10 years ago," Apotheker said.

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