Is 2014 the Year of the Hybrid PC?

Is 2014 the Year of the Hybrid PC?

It's starting to look more favorable

Since Microsoft violently disrupted the PC market with Windows 8 two years ago, there have been lingering questions about modern hybrid PCs and whether the sale of such devices would ever stem, or even reverse, the ongoing PC downturn. But this year, finally, things are looking up. Thanks to a combination of factors, these new hybrid PC types may finally be coming into their own.

Don't get me wrong. I don't really believe that hybrid PCs will be the breakthrough tech product category of the year. But having long viewed these devices as the future of the PC market, I've been surprised by the slow uptick thus far. That may be changing.

First, we should probably establish what's meant by the term "hybrid PC." Most people use the term "2-in-1 PC" to describe any modern PC—running Windows 8 or newer—that can be used in at least two different ways, with the most frequent combination being a tablet and a typical laptop-type PC. But some hybrid PCs are actually "3-in-1," "4-in-1," or whatever, in that they provide more than two usage types.

A bigger issue, for me anyway, is that there are really two primary ways in which a PC maker can build such a product: The screen can be removable, or not. So I reserve the name 2-in-1 PC for those PCs that are in fact tablets (the guts are behind the screen and not under the keyboard) and come with (or have an option for) a snap-on keyboard that turns the device into a top-heavy laptop. With the second category of hybrid PC, called a transforming PC (or a convertible laptop), the screen does not disconnect from the device. Instead, you can swivel that screen around in some way and turn it into a thick and heavy tablet.

The Surface Pro 3 is a 2-in-1 PC, as are all Surface models. In its native form, it is a tablet. But you can snap-on the Type Cover keyboard and use it like a laptop.

The Lenovo Yoga 2 Pro is a typical transforming PC because its native form is a laptop. But thanks to its unique hinge, the device supports four usage modes: Laptop (obvious enough), tablet (but thick and heavy), tent and stand.

Each form factor type is quite versatile in its own way. A 2-in-1, for example, benefits from its possible use as a pure tablet, obviously, but the ability to mix and match keyboards in some cases—as with Microsoft's Surface, the Dell Venue 11 Pro, and the new ThinkPad 10, among others—is perhaps just as advantageous. A transforming PC, meanwhile, makes the most sense for someone who will primarily need a laptop-type PC but would like occasional tablet usage; it's a good first step into the multi-touch world of the future.

Because they are real PCs, both can docked and used as a desktop PC, increasingly their versatility. One thing I don't see any more at press events is some trendy blogger pulling an iPad, a dock, and keyboard out of their bag and trying to pretend they can get real work done. They've simply given up the pretense. But with a hybrid PC—which is a real PC—there's no pretense. It just works.

Choice is still the double-edge sword of the PC industry, of course. Neither form factor is inherently "superior" for all users, and that's part of the reason for all the questions around the viability of these devices compared to traditional PCs or as alternatives for those who currently carry both a traditional laptop/Ultrabook and a tablet.

But it's only part of the problem. These hybrid PC designs were of course introduced in the worst PC recession in history. They ran the initial version of Windows 8 at first, and so they were impacted by the negative vibes from that release. The first generation devices from about 18 months ago were immature, based on Windows RT in some cases, or weren't pushed hard enough by PC makers that were still unsure about the future.

This year, things are finally changing.

We're seeing some truly compelling designs—including the Surface Pro 3, Dell Venue 11 Pro, ThinkPad 10, and Lenovo Yoga 2 Pro I've already mentioned—that aren't huge compromises. Compare the Surface Pro 3 to either the Surface 2 or Surface Pro 2 to understand what I mean: Both of those latter devices are huge compromises in key areas, whereas the Pro 3 is the first of Microsoft's PCs to work comfortably in both the PC and tablets worlds. The phrase "no compromises" is out of vogue for obvious reasons at Microsoft, but this machine finally fits the bill.

Windows 8 has improved. Readers of this site know that Windows 8.1 and Windows 8.1 Update 1 both represent massive functional and usability improvements to the half-baked Windows 8.0 and that this OS is now much more seamless to use, regardless of which form factor or device types you prefer. And Windows 8.x will continue improving this year and next.

Pricing is more attractive. Many of the machines I mention above are pretty expensive, yes. But in the same way that the best car technologies debut in high-end Mercedes and other luxury vehicles, the best PC features likewise start at the top and work their way down. And with Windows now available for free (sorry, "$0") on really cheap PCs and devices and for much less on inexpensive PCs and devices, that means we're going to see more and better devices than ever before, and many will be really affordable. The transforming, multi-touch stuff isn't just for rich folk.

And PC sales have stopped their freefall. Indeed, tablets—which were supposed to replace the PC, essentially—saw their first year-over-years sales drop last quarter, which no one saw coming. And tablet sales will grow only 12 percent this year overall, compared to a crazy 52 percent the year before. Tablets are a key computing market, yes, and an alternative for some users, but not all. They're no longer seen as the end of the PC.

As for actual PC sales, Intel this week adjusted its quarterly and annual revenues predictions upward, and it did so because it now expects better sales of the microprocessors it creates for PCs. (Intel chips power about 80 percent of all PCs sold worldwide.) And while it will provide more information next month when it reports its quarterly earnings, the firm did offer a bit of insight ahead of time.

"In recent years, Intel has experienced declining orders in the traditional PC market segment," the firm noted in a statement. "[But] as a result of stronger than expected demand for business PCs, Intel Corporation now expects second-quarter revenue to be [better than previously forecasted] ... The change in outlook is driven mostly by strong demand for business PCs."

Businesses are notoriously slow to upgrade both hardware and software, and of course it's fair to wonder whether the recent expiration of XP support has contributed to this change. But many users were previously replacing PCs with smart phones and tablets. What Intel is seeing is an improvement in PC sales. An unexpected improvement.

I still think hybrid PCs make plenty of sense. And in the same way that thin and light Ultrabooks took over for the clunkier laptops they replaced, I think that these 2-in-1 and transforming devices will eventually replace the less versatile Ultrabook. It won't happen this year, not really. But this could be the year that these products turn the corner.

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