Meathead:
I don't disagree with any of your points, except that the assumption that second (or third or fourth) time buyers don't want to "touch" their system before they buy it.
I have bought seven PC systems in the last 13 months (four of them notebooks), two of them Macintoshes, five IBM compatibles, all brand names.
In every case, however, I wanted to try out what I was getting. (I may be strange, but I rate the keyboard and its feel as extremely important.) True, on a desktop system, that can be easily replaced (and I have only bought about 15 keyboards in the last year), but on a notebook, you are stuck with the keyboard.
Right now, I am lusting after the new Dell Inspiron 3000, with the 13.3" TFT display, and it just went down in price to $3399. Great price, but what if I don't like the keyboard? On most laptops, I do not like the keyboard (IMO, the Thinkpad keyboards are great, and all others only so-so.)
But I don't know anyone with a Dell laptop, so I have to take my chances.
Ergo, give me a Dell store I can visit and check it out.
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I understand Dell not wanting the first-time home buyers. I wouldn't want them either.
But they are proliferating like crazy (my parents, a brother, a close friend, a friend's parents -- all these people have become first time PC users in just the last three months -- they are all getting on the Internet and no longer watching TV).
One of these people bought a $3000 Gateway system (he overpaid)-- the others got cheap new systems or cheap used systems.
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The next question is what will these people get for an encore? I suspect some of them will never upgrade (unless someone else buys for them), but most will eventually.
Will Compaq be able to bring its costs down to the level of Dell? If so, they will pose a lot of competition, especially if you can buy a Compaq in the store and you have to rely on mail-order for Dell.
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As far as $300 systems always having been here -- true, I suppose, but I believe the biggest non-price driving force for people wanting a PC today is to get on the Internet. (Sure, you could get on CompuServe ten years ago with a $300 system, but it costed $6 or $12 AN HOUR.)
DOS machines are no good for the Internet, and even Windows 3.1 isn't all that great for the Internet, so Windows 95 and a Pentium is a minimum requirement for that. THAT won't change much in the next few years, even with Windows 98 which is really not much of an upgrade.
So, I contend that the requirements for MOST people for at least the next two years can be fulfilled by a Pentium-166 with 32M of RAM, a 2G hard drive, am 8x CD-ROM drive, and a 28K or 56K modem. Whatever monitor they choose will last quite some time. (If you don't agree, substitute the P-166 with P-200 or P-233, they don't cost much more.)
More than anything, what people will look for in terms of upgrades to these baseline systems will be faster communications with the Internet. So, they may add a network card if and when they get @HOME cable modems or ISDN or a satellite dish or whatever. A faster CPU won't give them faster Internet access -- only faster communications.
Your arguments are based on the fact that PC owners have always upgraded and always will and will learn from their experience to get at or near the top-of-the-line each time they do upgrade. The market keeps growing and while costs keep going down, the good box makers find a way to increase sales and profits.
It is a very logical argument.
But 1997 has been a VERY different year in terms of PC evolution. Proof: 1. New PCs for less than $1000 from major manufacturers. 2. Incredible price drops, where new PCs can cost half of what they did just three or four months ago. 3. Popularity of the Internet bringing many first-time users/buyers into the fold. 4. Computer-user awareness of the price-dropping phenomena and the patience to wait and buy a bargain. 5. The beginning of real consolidation where the top five comprise a record percentage of the market share.
Big changes bring great wealth to some and downfalls to others. I think Dell will continue to makes lots of money on their notebooks (where the technology still has a long way to go to be truly useful), but I suspect it is in for some major challenges on the more mature desktop side.
Doug |
