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To: EricRR who wrote (7301)	9/1/2000 5:49:39 PM
From: Bilow	Respond to of 275872

Hi EricRR; Thanks for responding to my diatribe... You wrote: "I think your argument is related to the "cpu's are getting faster, but consumers will never need that kind of speed" arguments." Not the case. The reason computers are going to get smaller and smaller is because smaller computers are faster than larger computers, not that consumers have no need for fast computers. The only reason for not making them small now is power consumption, but look how much power the Transmeta uses. The issue of what speed computer consumers will buy is one that is too complex to simplify to the point of saying that they will "never need that kind of speed." What is really going on is that the bulk of consumer demand changes as computer speeds change. Everybody will take the 10x faster computer if it is available for only $1 more. On the other hand, if it costs $50,000 to get a machine that is 5% faster, very few people will opt for that. The real issue is what price the speed comes for. So an analysis of this trend needs to take a look at what the performance/price trend on computers is. The best way of doing this is to make a chart of some measure of system performance, versus system price. Then redraw the line for successive years. Over the years, the lines inevitably move up, as performance increases at any give price. But what is interesting to look at is the relative slopes of the lines. What I'm thinking of is a graph that might look something like this (price in hundreds of dollars, performance arbitrary): Performance: 26 00 25 24 00 23 99 22 21 00 99 20 98 19 18 99 98 97 17 97 16 00 96 15 99 98 97 14 96 13 12 95 11 00 98 97 96 10 95 9 99 8 7 96 95 6 00 98 97 5 99 4 98 96 95 3 97 96 2 95 1 1 1 1 1 1 1 1 1 1 1 2 2 2 2 2 2 2 2 2 2 3 3 3 3 3 3 3 3 3 3 4 4 4 4 4 4 4 4 4 4 Price: 0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 As long as you get a lot of relative performance for the relative dollar, consumers will trend towards the high end. That is, consumers will tend to purchase machines at about the price that corresponds to the highest performance/dollar point on that year's availability. What we are seeing is a serious climb in the performance of cheaper machines, relative to the performance of more expensive machines. That keeps pushing the curve of where consumers naturally buy machines to the left (i.e. cheaper) side of the graph. -- Carl