Of course there will still be room for dedicated desktops and servers and laptops.
But how many people will really need one? What do people really use their desktops for?
Games, email, websurfing, media player.
But consider something like storage, for your photo collection, say.
You can have a desktop computer with a fast processor, a big hard drive, a big monitor, a full sized keyboard. But the desktop case that ties the whole system together is the anachronism. Of course if you want a high end system, then buying a processor in a large box where size doesn’t matter will get you more bang for your buck.
But for most people, the fast processor is irrelevant. They just need an appliance that lets them read email and stream media. And that’s your “phone”. And the device can talk to whatever size monitor you have around you, it can talk to an external hard drive, it can talk to an external keyboard.
I know people have been predicting the death of the desktop for a long time. I’m not so much predicting the death of the desktop as that the desktop is going to continue a long slow decline into a specialized gadget, for people with particular needs.
Or to put it another way, 5 years ago nobody had a smart phone. And for decades, all sorts of products had been produced in this space (PDAs, etc, etc), and every one of them had failed. And now we finally have several successful products of this type, even though Apple is the biggest player by far. And so now that there is a proven successful business model for these things, and people are buying them, they are filling a need that was previously only able to be met by having a desktop computer.
So for lots of people, the need to have a desktop will become smaller and smaller, as smartphones get more and more capable. And for the times when a desktop might make sense, those people can just get a peripheral for their smartphone rather than a whole desktop system.
The threat to Microsoft is obvious. Who needs a Windows desktop system when you’ve got a phone that can do 98% of what you want? And if it does 98%, people will figure they don’t need that 2% and get used to not having it anymore.