Windows 2000 could spark DRAM sales
By Mark Hachman and Jack Robertson
Electronic Buyers' News
(02/11/00, 04:19:02 PM EDT)
While the launch of the commercial Windows 2000 operating system from Microsoft Corp. won't have office workers mobbing stores at midnight, they might still grab an extra DRAM module from the bargain bin.
That may be a bit of good news for DRAM makers, which have seen spot prices plunge yet again from a September high-water mark. Analysts predict 128 Mbytes will be the default loadout for a corporate Windows 2000 machine, up from the 64 Mbytes typically used for corporate Windows NT 4.0 or Windows 9X-based systems.
Microsoft will unveil the corporate operating system on Wednesday, and analysts expect most if not all PC OEMs will have some systems available. Hewlett-Packard Co. and other OEMs have also been quietly shipping Windows 2000 systems since January.
Nevertheless, OEMs should not expect a rush on memory modules. Most computers selling for more than $1,800 generally ship with 128 Mbytes of DRAM anyway, said Sherry Garber, an analyst with Semico Research Corp., Scotts- dale, Ariz.
Gartner Group Inc., Stamford, Conn., estimates that only 15% to 20% of users will upgrade their current machines for the Windows 2000 transition, but that number will jump to 40% by the end of 2001. In servers, the company expects only 5% of the current base will upgrade, again jumping to 40% at the end of next year.
Even less certain will be the number of systems shipping with the new operating system already installed, and whether Windows 2000 will be seen as a necessity across the board or as a high-end option for memory-rich PCs. Key will be the price of DRAM at the time.
“The question really is the upgrade market,” Garber said. “But we're just not sure how many people will run out and buy this thing.”
Bob Fusco, DRAM marketing manager at Hitachi Semiconductor (America) Inc., San Jose, said Windows 2000 isn't as much a factor in promoting greater DRAM usage in PCs as the prevailing memory prices at any given time.
“When DRAM prices were very low last summer, OEMs increased the memory size in value-line PCs to 64 Mbytes and to 128 Mbytes in some cases,” he said. “When prices shot up late last year OEMs cut back the memory size in value PCs. Now that DRAM prices are dropping again, they are starting to increase PC memory size again.”
Still, Jim Sogas, director of the memory business unit at Hitachi, said that “every time Microsoft makes a major OS revision, they underestimate the necessary memory by about half. In my opinion, this is an attempt to make the cost of upgrading the OS appear to be lower.”
An OEM can assume two things, according to Michael Gartenberg, vice president of personal and distributed technologies at Gartner Group. “First, every shipping processor is Windows 2000-capable,” he said, which eliminates the need to upgrade that component.
Second, users will upgrade 64-Mbyte systems, and new Windows 2000 PCs will ship with no less than 128 Mbytes.
A spokeswoman for Dell Computer Corp., Round Rock, Texas, which was 1999's top U.S. PC vendor and second in worldwide sales, said the company's only Windows 2000-specific change is the memory upgrade.
“If you're deciding between upgrading from 64 to 128 Mbytes or a faster processor, you're better off with the memory than the processor,” Gartenberg added.
Gateway Inc., San Diego, is installing a free copy of Windows 2000 for users who upgrade from 64 to 128 Mbytes, or from a 5- to a 10-Gbyte hard drive, according to Mike Stinson, director of product marketing at Gateway Business. Still, the OS will likely be offered as an option for the near future, not a standard feature, he said.
The Windows 2000 OS will also benefit from two other hardware features that have languished for years waiting for Microsoft to catch up: support for “true” Universal Serial Bus and “sleep” features, according to analysts.
Dean McCarron, an analyst at Mercury Research Inc., Scottsdale, Ariz., contends the beta version of Windows 2000 is easier to use than the older Windows NT 4.0.
In addition, the company noticed broader plug-and-play support for USB peripherals, which were out in force at November's Comdex exhibition. “[Windows 2000] fills the last hole in the USB puzzle,” he said.
The Windows 2000 OS should also serve as a better solution for the notebook market, increasing the DRAM content there as well.
The problem, according to Gartenberg, is that OEMs have been reluctant to ship laptops with NT-based operating systems due to the operating system's inability to initiate a trouble-free, low-power sleep mode known as “suspend and resume.” “Windows 2K will be a big boon to power management, because suspend and resume finally works,” Gartenberg said. “Previously, suspend has worked great; it's resume they've had a problem with.”
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