Is the PC really dead? Many pundits have claimed to answer this question and they can be segregated into two camps - (1) those who believe that tablets are replacing PCs as "Post-PC" devices, and (2) those who believe tablets are merely "PC-Plus" devices. IBM, having sold their PC business to Lenovo in 2005, falls squarely in the Post-PC camp, while Microsoft is a proponent of the PC-Plus line of thought. I would say the "Post PC" camp is closer to the truth.
To explore this further, let's first take a look at the current state of the PC market. It has been a very weak year for the PC industry, and Q4 2011 has been even weaker. These figures cannot be explained away by weak macroeconomic conditions as spending on smartphones & tablets has exploded over the same time frame. In fact, these weak results can be attributed directly to spending on emerging mobile technologies instead of PCs. This trend has been even more pronounced in the consumer segment, as enterprise sales have kept PC sales relatively afloat in 2011.
How have companies been affected by these market conditions? HP & Dell have seen their revenues plunge. Dell has responded by distancing itself from the PC business and focusing on the enterprise business. HP has pinned its hopes on Ultrabooks and Windows 8 to save this market, but as I've stated earlier, that's very unlikely. Three of the other top vendors (Lenovo, Acer & Asus) have diversified into Android Tablets and will be releasing Windows 8 tablets as well - betting on the field is usually a good idea.
Now, let's try and understand where the PC is headed. In order to do this, we need to break down the market into two segments - (1) The Consumer PC Market, (2) The Enterprise PC Market. As PC penetration levels are extremely high, both these segments really represent the replacement market.
1) The Consumer PC MarketThe consumer technology industry is in the midst of the mobile revolution, and the PC has been the biggest victim. This revolution is being driven by two factors - usage patterns and price points. So what are the usage patterns of an average home PC user? Browsing, communication (email, chat, social networking), media (pictures, music, video), light word processing and possibly light picture editing. A tablet offers the same functionality, with a touch interface, at a far lower price point ($200-$600). The only disadvantage to a home user is the inability to write out long emails/text (or blog posts) on a touchscreen, but even this has been overcome with the launch of hybrid tablets with keyboard docks (true "Post PC devices" like the Asus Transformer series and similar products from Acer & Lenovo). Now, with the upcoming launches of cheaper tablets with even more processing power (new Amazon Kindle Fire, Asus Memo 370T), it is safe to say that the PC is truly dying in the consumer market.
2) The Enterprise PC MarketThe enterprise market is currently somewhat of a safe haven for the PC. A lot of companies have started buying tablets, but are currently using them as "PC Plus" devices for their mobile workforce. The enterprise market tends to be far more risk-averse than the consumer market, as usage trends depend on compatibility of legacy and productivity applications - Microsoft has pinned the future of Windows 8 on this. But tablets are taking some massive strides forward, that should start pressuring PCs soon. Both the iPad and Android tablets have good virtual machine applications, that will allow company servers to run legacy applications and run it on tablets. Ubuntu on Android has recently been released, and it offers all the functionality of both, Android and the Linux Operating System (including full Office/Productivity Applications). These two innovations should help enterprise users enter the "Post PC" era.
Conclusion - Analyzing both market segments, it's clear that consumers are driving the Post PC revolution, with the enterprise slowly making its way. It may not be too long before the PC goes the way of the dodo.