Jim, thread. What I am about to write could be quite bearish concerning the PC industry over the short term and I am hoping the use of short term is the correct statement and it doesn't develop into something much different. Are we at the beginning of seeing the top in the PC industry, just like what happen to minicomputers, and mainframes before them? The sub $1k PC has herald in a sea change on how consumers perceived the value of a PC. Also, it will not be long till $1k PC are targeted for the corporate world. Margins could be shrinking industry wide. Making margins up with selling servers and workstations might help but the selling price of those items too will be becoming down especially if a home server market develops and the fact that the barrier to enter in the workstation market is coming down fast also. If a home servers markets for consumers does indeed develop, we could see non pc devices connect to a home net so the days of multiple PC in a home could be numbered with home servers taking center stage. How much power does a user really need? Where are the applications to take advantage of the power we have now? MMX seems like a marketing ploy, I have seen very little apps that say MMX enabled or needed. Does a consumer need 4 or more gigs in a HD? Is the only growth in the pc industry to be found in consolidation and emerging markets which can't afford the top of the line PC anyhow? Some say the WEB is the killer app. but the PC industry could become just one of the many players with more and more non-pc devices connected, that home server market could usher in. How much powers does a user need to read or send e-mail or to surf? Video streaming over the net will require faster links much more then a faster PC. INTC realizes the need for faster links that's why they are driving down the prices of NICs and getting into cable modems. INTC is also trying to justify and continue PC obsolescence that PC industry is currently thriving on, the so called "Upgrade Cycle." The Mercer CPQ will not be installed in consumer device, it will be targeted to the server and workstation market. Is the upgrade cycle ending after we get to a 100 meg bus, 400 meg CPUs, that we seem to not need anyhow? Last year I was thinking that DVD and xDSL modems would drive the PC industry this year, but where are they? DVD industry is fragmenting before my eyes with infighting, and xDSL market is taking forever to develop because of Telcos foot dragging. The only thing that I can think of that settles my mind a little bit is the statement made by IBM in the beginning of the computer age that they could see the need for maybe three or four computers to satisfy the complete world computing needs and how wrong that statement was.
Greg |
