Jason,
for 70-80% of corporate desktop, 200MHZ Pentium is more than enough power. I think the key is to look at the applications. I am a software developers in a big company. We have just recently rolled into 200MHZ machine and I find that it's performance is excellent for my day to day work. Most of my desktop top applications consists of e-mail, accessing to server for my development work, Internet access, writing document. All the database access, compiling (heavy duty type of computing) is done through the server, not my desktop machine.
I am down on the entire PC box making sector. The sector will continue to grow in units but the profit will shrink. I think a very clear indication is the continue erosion of price of the top end machines. These machines are traditionally the biggest money maker (fatest profit margin). It used to be priced at $3000 to $3500 for the newest and fastest machine. But I think lately you see that the top machine come out at $2000 - $2500 range. The price are driven by the supply and demand picture. Unit volume for 1998 is predicted to be around 13%. But the average PC price has dropped more than 13% and continue to go down as the lower end grow faster and faster. This imply that the industry in flat to lower in Revenue based in 1998. Given how fast all the manufacturer are building capacity (more factories) in the last few year. I think the supply has already overshot the demand and it starts to drive down the price of the PCs and in the process take out the profit for all the manufacturers. It won't ge better until some companies left the race by shutting down factories etc.
This cycle affected DRAM makers, disk driver makers, CDRom makers, and it is happening to the monitor maker also (have you see how fast the price of 17" monitor come down in the last 6 months?). IMHO we are going through the same cycle for PC makers.
I don't know if this is the right scenario, but I am short both CPQ and Dell. Hope that work out.
manwah
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