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Why The U.S. PC Market is On The Decline 317

conq writes "BusinessWeek reports on the recent woes of Apple and Dell. One possible reason according to the article: 'imminent price wars'." From the article: "'There's a softness in the market that's building,' says Richard Shim, a senior research analyst at IDC. In the past two weeks, IDC cut its 2006 forecast for U.S. PC growth to 5.7%, from 6.8%. 'In '04 and '05 there was tremendous growth. In a market that's as mature as this industry is, there's no way you can maintain those levels.'"
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Why The U.S. PC Market is On The Decline

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  • Wallstreet Nonsense (Score:5, Interesting)

    by 99BottlesOfBeerInMyF (813746) on Friday July 14, 2006 @04:47PM (#15721893)

    Gee Dell and Apple will be announcing their projected numbers in a few days. Well, I guess we'd all better listen to the "analysts" whose accuracy rate is about the same as flipping a coin. Speculation and stock fluctuations before these announcements is pretty much par for the course as people make guesses in the hopes of a stock market win. The rest of us, however, are a lot more concerned about Q1 and Q2 numbers that actaully, you know are how much they are selling.

  • One word... (Score:3, Interesting)

    by Cytlid (95255) on Friday July 14, 2006 @04:53PM (#15721938)
    ... Virtualization.

      A friend of mine gave me a dual P3 933 machine with a gig of ram, I put a 100gig sata drive in it, and put Vmware server on it. Now I have 12 virtual machines defined... (no for all you picky types, not all run at the same time, 3-4 at most) ... and out went all the old hardware in the basement. My wife was happy.

      Of course, I'd like to buy a nicer 64 bit machine for this server ... but I have the ability to sit back and wait.
  • Re:Stupid Title (Score:3, Interesting)

    by User 956 (568564) on Friday July 14, 2006 @05:05PM (#15722012) Homepage
    The title of this article is "Why The U.S. PC Market is On The Decline", but right in the summary it says that IDC expects the PC market to grow 5.7%!! That's not decline.

    There's a decrease in the amount of increase. Clearly you need to brush up on your journalistic doublespeak.
  • (exactly)^2 (Score:4, Interesting)

    by patiodragon (920102) on Friday July 14, 2006 @05:13PM (#15722060) Homepage
    My computer was built in 2002, and for my home still serves as a fileserver for 4 computers and a test web and database server. The "kiosk" laptop we use to surf the web and play streaming music is a Pentium III. No problemos here with linuxes (statiticians, please add 3 to linux column and subtract same from Operating Systems "in use").

    Vista is a great name for MS's next OS: Chance I would use it is WAY off in the distance.
  • by HTH NE1 (675604) on Friday July 14, 2006 @05:16PM (#15722071)
    My general use machine at home is a Blue & White G3 upgraded to a 550 MHz G4. I've found that the videos at ABC.com require I hold down the mouse button to get a non-zero framerate. I never thought I'd need to grip a Dead Man's Switch to watch TV. My mother's eMac is faster than my machine.

    I need a new desktop Mac. I'd buy a Quad Core G5 now if I knew an Intel Core Duo card for it that would let me run future Intel Mac binaries was coming. Especially if it meant I could have 64-bit quad core and 32-bit dual core running simultaneously. Instead I'm torturing myself waiting for the new Intel desktop Mac announcement and wondering if I should pre-purchase Parallels Desktop (there's a $30 rebate w/purchase of Windows that expires August 15, not applicable to the downloadable option), and I don't even know how many internal drive bays the new desktop model will have.
  • by geekoid (135745) <dadinportland@y a h o o . com> on Friday July 14, 2006 @05:24PM (#15722112) Homepage Journal
    It's slowing down because the practical usefull lifespan of computers is increasing.
    Until the CPU died, I was running the latestest games and microsoft programming tools on a 1.8 Ghz box with 768Megs of RAM.
    Now I ahve upgraded to a 3Ghz and 1 Gig of RAM my compile times have been cut buy only 25%, and the increase game performances was good, but not spectaular, or nearly twice as good.

    I remember (as do many of you, I'm sure) when in order to play the newest games you HAD to buy a new processor. Not any more.

  • My point Exactly (Score:4, Interesting)

    by AnyThingButWindows (939158) on Friday July 14, 2006 @05:31PM (#15722151) Homepage
    G4 Sawtooth 450mhz updated to: 2.0ghz Powerlogix with, 2.0gb PC 133 ram, Radeon 9800 Pro 256mb, 80+120gb WD HDs running on ATA 66, + SATA 3.0 4 channel card running a 400gb Samsung + 16x Pioneer DVD+-RW. Tiger 10.4.7 / 19in Envision LCD.

    This machine is 6 years old, and runs Quake 4, Doom 3, and Halo like a dream. I don't see any reason to upgrade to a G5 when I am running 86+ scores on Xbench. I probably won't upgrade for another year at least.

    Yea, it has a 100mhz bus, and fights between resources, but if im doing one or 2 things at a time, it flies.

    http://www.kore-net.com/office/sawtooth.jpg [kore-net.com]
  • by jfengel (409917) on Friday July 14, 2006 @05:55PM (#15722279) Homepage Journal
    It's not really a question of "enough". It's a question of what a stock is worth.

    A naive interpretation of a stock's worth is that you take the company's assets, sell them, and divide them up among the shareholders. But a company is clearly worth more than that: it makes profits. So you should add to the worth the amount of money you could expect to make from it if you were to divide up the profits.

    But what are the profits going to be? That's hard to say, and much magic goes into figuring it out. People get some idea of what they think it's worth, and they price the shares accordingly. Their guesses aren't secrets: the company (sometimes) says what they think the profits will be, and so do analysts, and they share them.

    Make less than that, and the share price goes down. It has to: that share is worth less than you thought it was. It doesn't matter if it's still profit; your share of that profit is less than you thought it was going to be, and you'll pay less for it. And if you extrapolate form how much they missed this profit goal to the future ones that you already had figured in when you made your stock price, you'll pay even less.

    This is a vast oversimplification, sadly. The price goes down by more than the profit miss indicates because there's an overcorrection: people see others selling the stock and so they figure it's going down and sell theirs, too. Predicting that herd behavior is obnoxious, but if you were to buy-and-hold the stock for a long time the overcorrections will even out over time. Or you can day trade and take advantage of those overcorrections on a daily basis, but if you do your first investment had better be in Tums. In bulk.

    In other words: the share price includes a "discount" of what they expect future earnings to be. Miss those earnings, and you have to recompute the discount. An actual decline would be a disaster, but even less-increase affects your calculations.
  • by istartedi (132515) on Friday July 14, 2006 @05:57PM (#15722286) Journal

    In the Smithsonian's technology exhibit, I saw a graph that marked the rise of television in the 1950s. It was a saturation curve, rising very quickly at the 40 to 50 percent level, and then flattening and gradually moving up at, IIRC, 70 to 80 percent. I'm sure the transition to color and solid state provided some turnover, as will the hi-def transition we are in now.

    The lesson though, is that PCs will saturate too. They can surf the web and play DVDs. They can do word processing, spreadsheets, and most of the other "killer apps" people need. There's no more reason for turnover, and those that want 'em got 'em. I was looking out for this, and figured the real saturation started in the late 90s. For years, the state of the art PC was "about $2000", and then suddenly, very capable machines dropped through the $1000 floor. The vendors must have seen the curve flattening, so they had to reach into that lower price market to drive sales. That was the beginning of the end.

  • by Phillup (317168) on Friday July 14, 2006 @06:47PM (#15722514)
    Again, my son had an iMac. Built in firewire and full Net. plugged directly into the cable modem out port.
    Switching to the Mac mini - same basic firewire, same cable modem.
    No perceptible difference.
    Yeah, I got all that.

    I'm saying that something is even slower than your old iMac... it isn't the worst part of the equation... if you didn't notice a difference.

    Because, if the network connection can spit the data out fast enough... there is a huge difference between my oldest Mac and even a three year old system.

    I'd have to throttle my network connection back quite a bit for my G4 TIBook to be as slow as my wife's G3.

    In other words...

    If your network connection can't deliver data faster than the slowest computer can render it, you won't see a significant difference with a faster computer. It is already being rendered as fast as it is being delivered.

    That sounds like the situation *you* have... no significant difference between machines.

    I, on the other hand, see quite a difference between machines. (and my G5 is noticeably faster than my TIBook... but not nearly as much so)
  • by Ph33r th3 g(O)at (592622) on Friday July 14, 2006 @07:28PM (#15722689)
    . . . once it's impossible to access any legitimate "premium content" without a machine with a Fritz chip. With Dell, Apple, AMD, Intel, and Microsoft all onboard, and people wanting to watch new movies on their game consoles/DVD players/online banking terminals, there should be plenty o' sales all around once Vista arrives.
  • by dangitman (862676) on Friday July 14, 2006 @09:48PM (#15723121)
    What the hell are you going to connect your Digital Video camera to? You don't have to so a LOT of video stuff to appreciate Firewire, you just have to do ANY video work. Try getting a consumer video camera user to set up their camera with that "USB streaming" shit, and see how quickly they become frustrated. It often just fails to work, or at minimum, needs a bunch of stupid drivers. And even if you can get it working, the performance sucks. Most people would gladly pay more just for the convenience of being able to use Firewire and have their camera work properly with their computer. Most people's time is valuable - and the time spent fucking around with USB for video costs a lot more than a slight price difference - which is so minimal as to be laughable.

    Also consider that USB is a shared interface - you don't want all your other USB gear interfering with high bandwidth tasks.

    This is not hypothetical - I have helped many people with this conundrum, because stupidly, most consumer cameras today come with a Firewire port, but not a firewire cable. As soon as I tell them to buy a $5 firewire cable, or a $20 Firewire card, their frustration disappears, and is replaced with happiness and productivity.

  • by theJML (911853) on Friday July 14, 2006 @10:06PM (#15723168) Homepage
    I agree, however I recently installed Vista Beta 2 on my 4 year old Athlon XP 2500+ system with 512MB RAM, and it's working pretty darn well with every effect the OS can dish out turned on. Only thing I've changed in it since I built it is the addition of a GeForce 5900 Graphics card, which is far from top of the line. Honestly, I WAS thinking of upgrading in the future, not really FOR Vista per se (though that was part of the thought) and after seeing that once again, all my games still run and Vista is smooth so what's the point of dropping more money?

    I'm sure other people are in the same boat. Perhaps this is why there have been so many more laptop sales increases than desktop sales recently... people looking for that second computer they can take with them instead of replacing/upgrading that old one at the desk?
  • by WuphonsReach (684551) on Friday July 14, 2006 @10:09PM (#15723174)
    Should a corporate PC now have a lifespan of 10 years rather than 3 years ?

    Since performance no longer doubles every 12-15 months? Definitely.

    Most PCs bought in the last 5 years can easily last 6-8 years if they are taken care of, are running Win2k or WinXP, and have plenty of RAM (1GB is a good target for an office machine). Two years ago, we went through the office and maxed out all of the RAM on any machine with 500MHz or faster CPUs. For $100/machine, we added 2-3 years of lifespan.

    New machines are being purchased with a minimum of 1GB RAM and one of the slower CPUs (save $$$ on the CPU, spend it on the RAM). Now that dual-core chips are only ~$180 and getting cheaper, we'll probably start outfitting machines with dual-core chips and 2GB of RAM. I fully expect those systems to still be running in 2016. Maybe with a bump up to 3GB of RAM along the way, but mostly untouched.

    The next big upgrade cycle for us is going to be upgrading from 17" CRTs to 19" LCDs. Just about everyone has 17" CRTs on their desks already, so new systems are coming in sans monitors because the old CRTs are still working fine.

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