NW --- this is one of FEW up today! Very different! Nice different! A tad of news...
New York, Jun 22, 2000 (123Jump via COMTEX) -- Personal computer manufacturers
are adopting Henry David Thoreau's admonition to "Simplify! Simplify!" The idea
that "less is more" is driving the new-wave PCs. This new "legacy-free" design
in the manufacture of personal computers is intended to turn-around sagging
corporate sales and attract new users who don't need, understand or more
importantly, want to pay for all the extravagant extras built into many desktop
models
Since Apple (NASDAQ:AAPL) came out with its popular iMac last year, computer
makers have been rushing to duplicate its success. The iMac's move to more
simply designed personal computers has already revived Apple's stock. The
company's share price shot up over 150% after the iMac's release. The iMac in
colors such as strawberry, tangerine, and lime now sells about 700 000 units per
quarter. Not only did the iMac bring color to a beige world, more importantly it
brought new attention to industrial design. It simplified the computer by
eliminating an assortment of obsolete components.
PC companies have decided that in order to expand their markets, faster, more
power and sophisticated PCs are not necessary; but simpler, more reliable and
less expensive ones are.
The key buzzword accompanying this new strategy has been "legacy-free." The idea
is simple... Over the years hardware manufacturers have continued to add new
technologies to their PCs, however, throughout this time they have failed to
eliminate the old technologies. A legacy-free design concentrates on new
features while leaving-out older-dated technologies. The result is a PC that is
less powerful, but also less costly and easier to use.
Legacy-free systems attempt to depart from many of the features that users have
come to know. For example, the Industry Standard Architecture (ISA) bus, which
was developed by International Business Machines (NYSE:IBM) for the PC/AT back
in the '80s, has been removed. Some systems also remove the newer PCI bus,
eliminating expansion busses altogether. In addition, Universal Serial Bus (USB)
equivalents are replacing the industry standard PS/2 keyboard and mouse ports.
Most of the legacy-free designs on the market have also eliminated floppy
drives.
Without the complex legacy technologies, both the initial investment and the
lifecycle costs incurred by the manufacturer drop. Enabling PC makers to sell
the legacy-free PCs at roughly 15 - 30% less than the cost of traditional PCs.
These new models generally sell for between $500 and $1000.
Manufacturers are marketing versions of their new legacy-free PCs, or Internet
Devices - as some are calling them - to both the consumer and to corporations.
They visualize great potential in both markets.
For the consumer, the advantages of a simplified PC are many. For most users PCs
have become over-engineered and, therefore, poor value. Processing power has
gone way beyond the needs of most software. Hard drives keep growing, even as
storage moves over to the server. The result is that the consumer is paying for
a number of features he simply does not need or want.
Another failing of PCs is that they tend to be highly unreliable and typically
require a visit from the IT department for even the most minor of corrections. A
big claim for the legacy-free systems is that, without slots and cards
(circuitry designed to provide expanded capability to a computer) the box ought
to be more stable. The manufacturers say that with no hardware to install and
remove, the system will be easier to maintain. It is expected that for most
users, these boxes provide enough power to do the job. The fact is that very few
non power-users have to add cards these days anyway.
Manufacturers such as IBM and Compaq (NYSE:CPQ) hope that these new Internet
devices will be the answer they have been looking for to curb a slowdown in
corporate PC sales. The price is thought to be a big draw for corporations
watching their bottom line. Compaq's legacy-free iPaq, specifically designed for
corporations, ranges from $499-$799.
Computer makers have added a number of features to their new lines in order to
make them more attractive to businesses. For example, Hewlett Packard has gone
with the controversial sealed case approach on its offering, the ePC. Part of
the thinking behind this decision is to prevent employee meddling - including
anything from good intentioned tinkering to RAM memory theft and system
sabotage.
Manufacturers also hope that these new models will be a hit with the general
public, particularly the novice user. Along with the attractive price, the new
models provide a variety of features including quick and easy access to the
Internet - seen as extremely important to the 1st time user. An "instant on"
functionality is offered by many of the legacy-free models such as Advent E.go
produced by AMD and PC World. This model requires only 55 seconds to boot-up and
just 10 seconds to reboot. This is seen as an extremely important feature by the
casual user who most often only wants to access the Internet.
Apple may have created this new market for scaled-down, cheaper PCs but they are
no longer alone. Almost all of the major hardware manufacturers have either
introduced, or are planning to introduce, their version of the legacy-free PC.
IBM for example, offers a legacy-free model called the S40 P, part of its new
NetVista line, priced at $1695. Gateway (NYSE:GTW) offers the Astro, which
ranges between $799 - $898, and Dell's (NASDAQ:DELL) legacy-free WebPC priced at
around $1000.
The move to more simply designed personal computers has already done wonders for
Apple and is expected to boost sales throughout the PC industry. Some analysts,
like Roger Kay of International Data Corporation, forecast that these Internet
devices will soon make up 50 to 60% of the volume of PC sales. Others share his
optimism. Emilio Ghilardi, Hewlett-Packard's commercial PC product marketing
manager, estimates that such legacy-free PCs could hold 60% of the corporate
market two-years from now. Dell expects their new line to bring-in an additional
$10 billion over the next few years.
As hardware prices continue to fall at an estimated 15% per year, manufacturers
are becoming increasingly desperate for new ways to make ends meet.
Manufacturers are confident that the new simplified legacy-free PCs will turn
things around. The hope is that they will successfully attract not only those
who have never purchased a PC due to their cost and complexity, but also the
more knowledgeable user - who knows exactly what he wants and doesn't want to
pay for a list of features he doesn't need. The new strategy makes sense. The
question is, will it make money?
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