The PC isn't dead yet.

Is the PC era nearing its end?

It is not the first time this question has been raised. However, today this debate has assumed greater significance than ever before, and here is why.

Moore’s Law becomes irrelevant: The law that powered Intel’s fortunes for the past three decades has lost its relevance. Factors such as the cloud and virtualization have meant that customers no longer seek the fastest processors. The gap between technology refreshes will continue to increase, rendering Moore’s Law—which states that processor speeds for PCs will double every two years—completely irrelevant.

PC ecosystem weakens: Over the few years the PC ecosystem has weakened. Today there are only three global players who make PC building blocks—ECS, Gigabyte and Asus. Intel has already decided to exit desktop motherboard manufacturing. Out of the top PC OEMs—HP, Dell, Acer and Lenovo—two (HP and Dell) are not sure about the future of their PC business. Ecosystem momentum is a critical factor for the success of any product category, and the PC is losing that.

Intel’s dominance wanes: Intel has been the single most important factor behind the sustenance of the ecosystem. Till a few years ago Intel’s control of the PC ecosystem was so absolute that its wish was everyone’s command. But the failure of its two big category inventions—netbooks and ultrabooks—suggests that Intel no longer wields the same power.

Tablets rise: Intel now admits that it failed to anticipate the momentum for tablets. This from a company which probably invented the tablet category. In 2007, when the Atom was launched, and three years before the iPad, Intel had envisaged both the tablet (ultra mobile personal computer, or UMPC) and the phablet (mobile Internet device, or MID) form-factors. Many OEMs launched UMPCs and MIDs in 2008 and 2009, but due to the lack of a good touch interface and optimized OS platform the devices failed. As things stand today, Intel’s share in the 122 million tablet market (expected to cross 192 million in 2013) is negligible. Intel says that tablets cannot be used for serious content creation, but in the next two years the ARM processor which goes in the tablet will be as fast as Intel’s processors, and Android will become as multi-tasking as Windows.

The stock market too seems doubtful about the future of the PC and is betting big on tablets. In November the market capitalization of Qualcomm—which makes the Snapdragon processors that power nearly 50 percent of all tablets— surpassed that of Intel though its turnover is still one-third that of Intel’s.

Most probably, the future of the PC will hinge on how the ecosystem partners respond to these steep challenges over the next two years.