By Philip Elmer-DeWitt
January 19, 2012

37 years of computer history in three graphs, two blogs and a podcast

The chart above, one of three that Horace Dediu has posted on over the past two days, and which he discussed on his Critical Path podcast Wednesday, takes some explanation.

First, it’s on a log, not a linear scale, so every unit on the Y-axis represents an exponential increase in the number of units shipped. Second, it’s counting all units shipped — PCs, smartphones, tablets. Third, although Apple (AAPL) is the thread that runs throughout the 37 years of PC history represented here, there were many years when it was not among the top 5 PC vendors, as implied by the chart’s title.

But we’ll grant Dediu a little artistic license, because nobody has ever before displayed this information so clearly. Not only do his graphs (here and here) show the natural cycle of the PC industry — in which companies rise and fall in fairly predictable patterns — but it puts the lie to Wall Street’s consensus view about Apple’s future growth.

According to Thomson Reuters, analysts expect Apple’s 61%-per-annum increases over the past five years to slow to 12% in 2012 — which on a log chart is the equivalent of flatlining.

Bascially, they are projecting a future in which the company’s breakneck growth reverts to some kind of industry norm. But if you look at the patterns over nearly four decades of PC history, you can see these analysts are living in a fantasy world. In computing, according to Dediu …

“There’s no such thing as a steady state, where the company settles down to enjoy a long and comfortable life. Either it grows phenomenally quickly or it collapses phenomenally quickly. There is no in between.”

So when the Street projects 12% growth for Apple in 2012, it’s basically pulling its punches, according to Dediu, saying “let’s be conservative.”

“I just look at this chart,” he concludes, “and say, you know, to say ridiculous things like [iPhone sales] are going to double again next year doesn’t sound so ridiculous anymore.”

If you haven’t seen Dediu’s rise and fall graphs, check them out here and here and catch the podcast here. He’s also produced a YouTube video that puts the data into motion. We’ve copied a version below the fold.

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