Intel entering new era.
There is a major shift in the consumers mind towards PC pricing. Historically the average consumer PC sold for $2500. It appears now that the average price for a complete consumer PC wll be below $2000, and crashing. These are full featured machines with MMX technology. (Business PC's are even less). With AMD and Cyrix setting the new price points for CPU's, I don't see an upward move on pricing ever again. Part of the problem is there aren't good new applications that require all the horsepower the new PC's offer. (Also, while the Internet continues to grow a market for PC's, it run's comfortably on 486's). The consumer is becoming much more PC literate. While historically there was a PC upgrade factor every two years or so, without new applications that require the power, I think most upgrades will be peripherals, not the PC. Digital imaging is most likely the new hot spot for consumers, (cameras, scanners and photo quality printers). The good news for the consumer is that 200+ MHz PC's will be the entry point, whether the user needs the power or not. Windows98 doesn't appear to be that much different than `95 from a system requirement standpoint, so I don't expect the introduction of that product to drive sales in the manner that Win95 did. Intel will always have the major market share for CPU's, but I don't think they can maintain the historical profit margins. I'm also concerned about Pentium II. What does it offer that the MMX device doesn't provide? I'm afraid it will only exist in a niche market. Craig Barrett has his work cut out for him. CPU's have joined PC's as a commodity product. Their power has greatly exceeded the requirements of existing applications. Maybe Intel should devote some of their huge research dollars to developing applications that need this power. |
