Re: Profitless Prosperity
I'd like to address the other issue in this separate post. Certainly some players have profited more than others -- but this is hardly a new phenomenon in business.
I also don't think it's true that Intel, Microsoft and co. have been protected from competition. Intel competes with or has competed against Motorola, DEC, AMD, Cyrix, IBM, and others. New competition is brewing as many large chip-fab firms, smarting from DRAM woes, cast their envious gazes upon the riches of the MPU/CPU industry.
Microsoft competes with or has competed against Apple, Sun, DEC, IBM, Quarterdeck, SCO, and others. The simple fact is that Microsoft hits on all cylinders: product, finance, sales & marketing, R&D. I expect MS will be a big beneficiary of increasing PC penetration from falling prices and the resulting increase in PC capability/dollar.
Compaq has, throughout their entire history, grown at the expense of IBM. Their success has attracted some strong competition in the IBM-bashing segment, and IBM itself has gotten sharper. This could put the squeeze on Compaq. I've never been a big fan of theirs, having worked for a few years at a big company that uses mostly Compaq machines.
Dell is a different story. As far as I can gather, their success is a result of inspired marketing combined with a revolution in distribution methods. Decent product and solid execution have kept them out of trouble. Their long term prospects are bright but the shares are already priced for the optimum outcome. The company however should continue to post good profits.
I would expect software shops collectively to benefit from increasing PC penetration and connectivity via the Net. I have investment dollars in or looking to buy companies like Adobe, Macromedia, Autodesk, Discreet Logic, and some pipsqueak startups like Starbase and White Pine. Look for a lot of new entry into this sector though. Low overhead and startup costs should keep things lively here.
Regarding profitability, most hardware elements of the PC are characterized by short-run inelasticity in both supply and demand. This makes for pretty wild swings in the bottom line. The purpose of this discussion group is to figure out where we are in the context of those wild swings. My current view is that we're on the downslope but the arrival of the next killer app should turn things around -- like it has before, time and again.
Whew, I'll shut up now.
God bless,
PX |
