Twilight Of The PC Era?

Spending nose dives. The bleak economy has battered budgets everywhere, and tech buyers are getting by with less. In the post-bubble era, "there's a 'we won't get fooled again' " attitude, says Gary Beach, publisher of CIO magazine. A report by a Forrester researcher says the dismal spending trend isn't supposed to improve through 2004. And the question that really terrifies tech vendors was asked by Bill Joy, then chief scientist at Sun, at last winter's World Economic Forum in Davos: "What if the reality is that people have already bought most of the stuff they want to own?"

Trouble in PC-land. While consumers have found some reasons to buy new PCs, the corporate world has less incentive. "There's never been such a gap between the IT world and the consumer," says Ray Ozzie, CEO of Groove Networks. "In the corporate world, the bosses want to lock down the desktop so you can't install or change anything. But at home the same users can hook up cameras and music devices, and find new uses for their PCs." Meanwhile, PC makers are increasingly hedging their bets by selling more profitable electronics devices like TVs, cameras and digital jukeboxes.

High-tech dark side. No one disputes the benefits of technology. But people have learned that all too often the value of tech comes with an unwelcome downside. The biggest problem is security and disaster recovery, which that same Forrester report listed as the No. 1 priority for IT departments. It's an expensive, labor-intensive pursuit that does nothing for productivity, but does keep the systems going. In fact, our reliance on virus-prone computers is itself a scary proposition: what would be the consequence of an Internet blackout? Another dark-side plague is spam. The time spent deleting all the come-ons makes you question the value of e-mail itself.

Is that all there is? We've had it drilled into us that we should love the increased productivity of high tech. But technology has enabled companies to eliminate jobs or smoothly outsource them to cheap labor in distant lands. And high-tech connectivity makes us available to our employers at any time of day, at any location. "For many people, the productivity is not apparent," says Edward Tenner, author of "Why Things Bite Back." "Despite technology, they're not working shorter hours for more pay. They ask, 'What does productivity mean for me?' Certainly there's been no increase in self-reported happiness."

But while the "end of the PC era" thinking seems to have hit a nerve (and launched a healthy re-examination of where we are in relation to our digital tools) there's another, less dour way of looking at things. Every wave of innovation--the microchip, the PC explosion, the Internet boom--has built on those that came before. And every step of the way, technology touches more people, more deeply. Given that, it's a little ridiculous to insist that the big breakthroughs are far from over--it's actually easier for an act of genius to change everything. For example, a widespread penetration of the Internet, along with more powerful computers with lots of space on their disk drives, set the stage for 19-year-old college freshman Shawn Fanning to shock the world with his peer-to-peer file-sharing program, Napster. In turn, the unfettered party that followed help spread broadband even more widely, sold more computers, kick-started the digital music-player trade and, oh, almost shut down the entertainment industry. Putting piracy aside, the tech world is only beginning to exploit the legal uses of P2P--which in turn will create an environment for more innovations.

That's why the more contemplative people inside the industry view this moment as an opportunity to take stock, but certainly not a fadeout for dizzying technological change. "I've been hearing about the end of innovation since the 386 chip [more than 20 years ago]," says Pat Gelsinger, Intel's chief technology officer. "But we're not about to go backwards." Nick Donofrio, senior VP of IBM, concurs. "Our point of view is that we'll see six magnitudes of improvement in the next 35 years," he says.