>Chia-Bin Wang writes:
>No way PC penetrate 90% US population,
As currently defined, you and I totally agree that there is no way that the PC can penetrate 90% of the U.S. population.
>In some developing country, there're still a lots of family don't
>have a phone or TV.
I promise I understand this -- in past jobs I had plants not only in the U.S. and Europe, but also in India and China. I also graduated from INSEAD's (France) international program. I absolutely agree with you. My point was that you can simplify the argument that was being made to U.S. only and that there are still valid market penetration points.
>The trends show that the marjority of PEOPLE WHO PLAN TO
>BUY A PC will spent $1.5K ~ $3K on their purchase. Simple
>Q, how many people are buying x486s today? Why don't we
>see some peak sales on them ?
Because of two things. First, the definition of a "PC" is self-referential in this type of study. For Intel to rise to the next level, they can't simply rely on what the current PC market is but understand how to change the rules such that they can define a market which is much more inclusive. By doing this, they not only allow deeper U.S. penetration but will also lower the barrier to entry in countries with lower standards of living. The second reason is that Intel has been incredibly successful in getting folks to buy the latest and greatest microprocessor -- which accounts for much of their success. At some point, the "better and faster" strategy will run out -- and then it will take some additional feature/functionality or price or something to keep sales growing as strongly as Intel would like.
>I have no money and I need a car to commute. I'll buy a used
>car. Or should I shout at any car maker for $2,000 NEW
> LOW END CAR?
I agree that the NC is fundamentally flawed -- you're not going to get an argument from me on that. However, in your analogy, you said you needed a "car" instead of saying you needed "transportation". This small difference is critical -- if the railroads had understood it several decades ago, railroads would probably own airlines and the like. This is why all these management consultants get paid more than anyone think that they're worth -- correctly defining one's market so that it excludes and includes what you want for your future is critical to the growth of any company.
In your analogy, you might instead buy a motorcycle, or a bicycle, or bus fare, or something else. Each time the price of a car goes up (which has secondary implications on the prices of used cars as well), these alternatives increase in their attractiveness to you past some point which is defined uniquely for you, but which can be defined demographically to some extent. Looking at this another way, the automobile makers have decided to concede part of the personal transportation market to other transportation vendors -- and thus not aim toward 100% market share.
I agree that aiming toward 100% market share is usually a diminishing returns exercise. But there is some number (I call it 90%, but the one thing we know is that I'm wrong -- it's something else -- maybe roughly around that) which defines a market which is optimal. I'm arguing that the currently definition of the PC is a non-optimal market for Intel's future growth -- that a more inclusive definition is needed.
I'm surprised to see so much disagreement out there with what I thought to be a rather obvious statement. Gates and Grove have both gone on record as saying that they believe something is needed to change the definition of the PC and make it more universally acceptable. Both have in their mind when they say this retaining their de facto monopolies and maintaining very high growth rates.
Mark |
