Growth of PC Sales in This Decade
After the carnage in the Street and enough taste of bad blood, I want to put the future growth of PC sales in perspective.
First, the PC sales cycle per year is not a clock work. We had stronger than expected Q1 and Q2. We may have a lukwarm Q3. And we may or may not have an explosive Q4. So the notion of a yearly PC cycle invented by the Street is an educated observation at best. But we definitely have a nice 5-10 years in the running. I'll explain why later.
Second, the semi boom-bust cycle is just a grand excuse for the Street to suck commisions out of individual investors. Semiconductor was not realy a vital economic component until 1990's. And semi just became the new blood of the hardware side of the economy when the Internet became a real thing 5 years ago. And the entire semi world has been exploding ever since. While oil shortage caused panic in the Street in the last several weeks, how many people would imagine the effects of a semiconductor shortage in the new century? Oil was the blood of industry in the last century. Guess what is the new blood of industry in this new century? You guess it right.
Third, demand. Anyone who understands strategic planning of a business knows the importance of demand forcast. Now, I am not a person who has enough statistics and details to provide an educated demand forcast for PCs and microprocessors which we care. But I know the PC growth is much more brighter than most analysts said. I am not talking about quaterly variations. I am talking about demand curve in this decade. I know a huge PC demand "reserve" that many people have not fully realized. You guess it wrong. It is......
China + India
Today, PC sales in that market is neglegible compared to the US market alone. When people talking about PC sales, they mention US, Europe, Janpan, and lastly Asia-Pacific. They never mention what if sales of PCs in China reaches to a comparable level of color TV sales there.
You may not know that China is the largest producer and comsumer of color TVs, in a scale of 50 million sets per year. And in 10 years, China will be a computer consumer on par with US. Why? Every family in China desparately wants to buy a computer for their single child whenever they can afford it. For what? Education. When the Chinese understands that computer literacy is important for their children's future, they will trade their blood for a computer in a heart beat. With the WTO deal written in stone last week, China market can provide a decent PC growth in next 5-10 years.
Now, India. I don't know India much. But I understand Inians cherish education as amuch as the Chinese, given the experience studying and working with people from India. And India will overtake China as the largest nation in 5-10 years. India's economy is also doing better year now. So India will also provide a decent PC growth in the forseable future.
Now, simple trueth: PC processor market is a dupoly. And it will be a dupoly forever. When dust settles, people will realize that PCs are the number three big ticket items they must have for their family, after house and cars. I don't think houses and cars will be dead anytime soon. So I don't think PCs will be dead anyway.
Just my $.02 to all B&H AMD longs,
panic |
