Video may have killed the radio star, but the PC and a host of other seemingly outdated consumer gadgets live on in the face of many attempts to replace them.

Sales of smartphones and tablets are on the rise, pushed by companies like Apple (AAPL, Fortune 500) and Google (GOOG, Fortune 500) that say the newer devices can displace computers, but PC sales also keep on booming. Intel (INTC, Fortune 500) reported last week that its second quarter was its best ever, boosted by strong PC sales. And analyst group Gartner predicts computer sales will rise 22% this year.

It’s not just PCs. Digital cameras, laptops and MP3 players have become nearly ubiquitous tools for even the Luddites among us, even though smartphones can perform many of the same tasks that their single-function brethren can.

But a confluence of events among device manufacturers and service providers suggests that the end for the desktop computer and other “has-been” devices really is on the horizon. Unconnected gadgets are finally starting to lose their luster and are beginning to be replaced by more multi-functional, connected devices.

“We’ve been talking about this for 10 years, but what’s new is that component costs have come down, the ecosystem of services has become more mature, and these devices are supporting a wider variety of content now than ever before,” said Susan Kevorkian, mobile media and entertainment program director at IDC.

In other words, new gadgets have become cheaper, more functional and offer more bang for the buck than devices like the PC, MP3 player and netbook. High function but low-end smartphones are now available on low-cost wireless carriers like MetroPCS (PCS), Sprint’s (S, Fortune 500) Boost Mobile and Leap Wireless’ (LEAP) Cricket, and devices like e-readers have begun price wars.

Most importantly, newer gadgets offer more than just the devices’ primary functions themselves; many have a multitude of services that come with them. Tablets and e-readers have 3G connectivity, the ability to download a host of apps and access to GPS services, which most music players and laptops can’t handle. Some services like Netflix (NFLX) and Amazon’s (AMZN, Fortune 500) Kindle apps allow users to begin watching a movie or reading a book on one device and finish it on another device.
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“Consumers want content anywhere, on the go, and a seamless experience across multiple devices,” said Dmitriy Molchanov, consumer electronics analyst at Yankee Group. “It’s not just about the device anymore but the service that comes with the gadget.”

As a result, smartphones sales rose nearly 57% in the first quarter over the same period last year, according to IDC. And Apple has already sold 3 million iPads since April. Forrester Research expects tablet computer sales to overtake desktop PC sales in the United States by 2013. The installed base of smart phones worldwide will also overtake all PCs by 2013, according to Gartner.
What’s in, what’s out

Yankee Group recently published a study analyzing gadgets for their ability to connect to tasks that consumers crave like social networks, applications and multimedia content. The analysts then examined those devices’ potential to connect to services like GPS, subscription services and wireless networks.

The study found that smartphones, tablet computers, e-book readers, connected cars and connected televisions had the highest potential to be “transformative” in those important areas, and would become the next ubiquitous and “game changing” devices.

On the other hand, portable navigation devices, MP3 players, digital cameras and desktop PCs had largely already made their mark, and will soon be replaced by the newer devices, Yankee Group predicts.

Some are already getting replaced. Half of consumers have watched video on their MP3 players in their homes, according to a Yankee Group study. Google, for instance, said it experienced a huge spike in mobile searches during this year’s Super Bowl, as searchers opted to go online on their phones rather than laptops or computers.

Still, there will continue to be a market for some “outdated” devices. Smartphone cameras still don’t take photos as well as most digital cameras, and word processing is much easier and richer on a PC than on an iPad. Many are hesitant to put their entire photo album exclusively online without some backup on a PC’s hard drive, said Van Baker, an analyst at Gartner.

And connected gadgets with services may be great, but if more carriers stop offering unlimited data plans — like AT&T (T, Fortune 500) recently did — using connected devices for streaming Netflix movies, browsing the Internet and downloading apps may soon become an expensive enterprise.

“Are these devices going to go away rapidly? No,” said Van Baker. “There will always be some who want a phone just to talk on.”

The “Keep Austin Weird” campaign must have worked, because the Texas capital is among the country’s oddball cities that bucked the downturn.

In fact, Texas cities starred on the new list of recession-proof metro areas, with six of 21 spots, according to MetroMonitor, a quarterly report released by Brookings Institute’s Metropolitan Policy Program.

These 21 large metro areas were singled out by Brookings for keeping their labor and housing markets stable and posting robust economic activity during the past few years.

In fact, all but five of the 21 leading cities have economic output levels that top records set just prior to the recession.

“Most of these cities have some general characteristics in common,” said Howard Weil, author of the report and a fellow at the Metropolitan Policy Program. “They didn’t experience huge housing bubbles followed by a crash, and their economies weren’t rooted in the auto industry.”

Weil added that a number of cities are also government centers, like Austin, where job cuts have been limited and spending remains healthy.

Gross metropolitan product, a broad measure economic activity, has surged the most in the nation’s capital. In first quarter of 2010, the economy in Washington D.C. expanded by 6.3% from its pre-recession peak. Austin also touts considerable growth at 5.3%.

“We’ve seen a significant increase in government spending since the start of the recession, and even though it has been spread throughout other parts of the country, some of that extra spending stays in the D.C. metro area,” Weil said. “But if government hawks succeed in cutting spending, we could see the growth in Washington slow down.”

Meanwhile, as unemployment rates climbed higher in every major city across the nation during the recession, the jobless rate in Austin only rose to 7.1% in March 2010 from 3.5% three years earlier. During the same period, the U.S. unemployment rate spiked to 9.7% from 4.4%.

“We have a stable base of employment with the University of Texas, one of the largest universities in the country, and the second largest state government with 65,000 employees,” said Austin Mayor Lee Leffingwell.
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Similarly, job losses were muted in Austin, as employment in Texas’s capital city dropped by 2.3% from its pre-recession peak through the first quarter of 2010.

Leffingwell said that a decade ago, Austin worked to attract high-tech companies, and while some manufacturing jobs in the sector have since diminished, companies are still expanding their workforce, including Samsung Electronics, which recently announced a $3.6 billion project that boosts the company’s payroll by 500 permanent positions.
Dallas: Fastest growing U.S. city

And during the last two quarters, Austin welcomed job growth, adding nearly 8,000 new jobs during the period and increasing payrolls by more than 1%. Augusta, Ga.; Jackson, Miss.; Dallas; and Honolulu also posted similar gains.

“We’ve worked hard to diversify our economy and are aggressively targeting companies focused on renewable energy, medical technology and digital media,” Leffingwell said.

Earlier this year, Texas invested $1.4 million through its Texas Enterprise Fund to lure Facebook into opening its first office outside of Palo Alto, Calif., in Austin. The social media giant opened the office last month and is actively hiring for its online sales and operations team. Facebook said it plans to hire over 200 employees in Austin over the next four years.

Meanwhile, further south, McAllen, Texas, which also made the top 21, has been boasting job growth for the past four straight quarters, and employment in the city has only declined by a modest 1.1% during the recession.

Houston, another Texas city, is included among the recession-proof metro areas for enjoying the smallest slide in housing prices at just 0.5% through the first quarter of 2010 compared to three years earlier. Austin followed close behind with a 0.6% dip during the same period.