Re: Many interesting topics
Thanks for the great post!
Mr. Douglas said:
...the opposite of mass hysteria, maybe we should call it mass inaction.
Well, the nuances of market psychology are interesting but, at least for me, incomprehensible. That way lies madness. <g> I just try to pick the winners based on earnings. <g>
Mr. Douglas said:
What I will offer is a few possibilities on what will begin the next wave of PC buying.
This is, really, the crux of the entire situation. The hundreds of companies comprising the PC supply chain and hundreds more indirectly related will be impacted by this. I believe we need to think long and hard about this issue, and if we draw correct conclusions leading to accurate understanding of the future we stand to gain much.
Heheh, easier said than done.
Mr. Douglas said:
The next killer app. What will it be? My guess would be something from the broad area typically given the label communications. Specifically my bets would be on voice.
This is an interesting comment you make. Can you elaborate more, please? I have ideas along similar lines but I'd like to hear yours in more detail while you are yet unpolluted by my sermons. <g>
Mr. Douglas said:
I firmly believe that the world is on an irreversible course toward prosperity.
That's a remarkably optimistic forecast. Sunny days are here, nevermore to rain again? I have to disagree heavily here. I would respectfully venture that if you were to take a little trip around the dusty corners of the world their definition of prosperity differs materially from yours. Most notably, it does not include PCs or HDDs. Yet.
Mr. Douglas said:
All the "Asia Crisis" will boil down to is a confidence builder that these countries can make mistakes, learn from them and continue to grow.
Here again I must differ with your view. I believe you are in error by characterizing the problems overseas as the result of "making mistakes". Let me see . . . this would be equivalent to putting the mailroom clerk in charge of platter engineering, and attributing the resultant mess to the clerk's having "made mistakes." The problem is much more fundamental; mailroom clerks simply are not good at engineering. The ones I know, anyway. <g> Similarly, the problems overseas are much more fundamental; we have mailroom clerks (and thoroughly corrupt ones at that) dictating economic policies and industrial progress. Shudder.
On the other hand I do agree that much of the potential untapped growth for the entire PC supply chain market lies abroad.
But I fear that potential will continue to remain potential. To paraphrase Calvin Coolidge, "Nothing more common than the unsuccessful country with potential."
Mr. Douglas said:
The fact remains that fewer than 5% of the world owns a PC...
Yes that may be true, but wouldn't you agree that it's not really a material datum? Fewer than 5% of the world owns a telephone either. Or a VCR. Or an automobile. Etc. Etc.
A more interesting question is, out of the proportion of the world that is capable of owning a PC, how many of them do? When I think of this, I get visions of cathedrals and cafes and windy little streets paved with stone. <g> That's from where the near term growth will come. IMHO.
Mr. Douglas said:
We have unquestionably been going through an inventory cycle in PCs. Was the main culprit the JIT manufacturing introduced by Dell?
I find it difficult to pin blame on a party that has achieved much in the way of increasing the efficiency of the PC economy as a whole. I have a theory (a formal theory! <g> I even wrote a paper about it <gg>) that pins more of the blame on a population that somehow seems to escape accountability for consistently leading everyone wrong . . . the analysts.
My theory in a nutshell:
1. Inventory cycles come about through a misalignment of supply and demand growth patterns.
2. Analysts often screw up demand projections,
3. Thereby screwing up the development of supply which leans heavily on those projections,
4. Thereby creating supply and demand imbalances.
Also, it never rains but it pours. On this go-around, many significant negative factors converged to hand the domestic HDD sector one of the worst spankings in its long history of spankings. Too bad I didn't figure this out until halfway through the spanking, costing me muy $$$.
Mr. Douglas said:
I don't think that many non-economists realize that it is the inventory cycle that has been the main cause of most of the recessions that the U.S. has seen this century.
Hmm interesting proposition. So much for a B.S. Economics, I wasn't familiar with this theory. <g> Could you kindly point me to some good reading on the subject?
Mr. Douglas said:
The consensus thinking on PCs seems to be that since the Internet does not require a massive amount of computing ability that the replacement cycle has been extended. I say wait and see. Many of those who bought a PC to fool around on the net are finding themselves wanting more and gaining confidence and familiarity with computers. These people will not be satisfied with a bare bones model forever.
I agree with the "consensus thinking" - actually I think it's pretty self-evident at this point?
Also, wouldn't you agree that many of those who "bought a PC to fool around on the net" are finding themselves mystified and impeded by the extraordinarily steep and long learning curve required to navigate a Win95 PC?
On this subject, personally, I believe Win98 is going to be a huge huge letdown for the entire PC supply chain. The next generation of UI should have been quantum leaps in both usability, intuitiveness, and power. Instead, it turns out to be a giant bug fix collection. Microsoft, now that they've stolen every UI innovation left to steal, proves (once again) its inability to advance the art on their own. This will have the greatest impact on certain vulnerable links in the PC supply chain . . . and I fear that, in my opinion, the HDD sector is one of them.
Mr. Douglas said:
Additionally many buyers reach the stage where they want to add so many features to their existing PC, but fearing that the system will not work, they just buy a new PC that includes everything they want already installed and working. I myself have done this, justifying it by saying that 10 or 20 hours of my time is more valuable to me than the expense of a new computer. I don't think I am that unusual.
Here I must disagree with you. I segment the user population into 5 categories.
1. 5% Ultra-power users: mostly the "technology enthusiast" crowd in the Moore technology adoption curve. These users never "just buy a new PC" because they love doing it themselves.
2. 10% Power enterprise users: this is the bucket into which you seem to fall. These users will prefer to save time via wholesale replacement, assuming they have that kind of control over PC procurement. Often, however, they don't. To their dismay. <g>
3. 55% Non-power enterprise users: these guys have no say whatsoever in PC procurement.
4. 10% Power home users: This group may behave as you describe.
5. 20% Non-power home users: This group isn't even aware of the "many features" available to add to their PC.
Thus, I think you are very unusual in (a) the desire to add that many features, (b) preferring wholesale replacement, and (c) having the procurement means to do so.
Whew.
If you read this far then some sort of congratulations are in order. <g>
God bless,
PX |
