Are We Really Surprised?

If you want to know why the PC business is in the toilet, look in the mirror.

The business used to be simple. Every few years Intel would come up with a new chip while Microsoft would come up with a new operating system and applications requiring the new power. We’d all troop down to the stores with $3,000 in our pockets and leave with the latest from the Wintel duopoly.

The Internet changed the game. For the last five years we’ve put our attention on servers. The browser wars were fun, but they generally didn’t require grand, new hardware on our desks. They certainly didn’t require faster hardware.

So it was that last week I dragged Tommy Bass (my computer expert) to Atlanta’s computer stores and suggested we go crazy. The idea was to build a home network that would let my two kids share my DSL line. We were looking for some cheap clients.

The main PC here is a 466MHz machine with 32 megabytes of RAM and a DVD drive. It does everything I need it to. The old 66MHz 486, reinforced with a 200MHz motherboard, finally died this summer, and I bought a flat-screen monitor for my tired old eyes, so all we needed were two boxes and networking gear.

Just $2,000 later, we left with twin Hewlett-Packard 733MHz machines, loaded with 64 megabytes of RAM each and twin read-write CD-ROM drives, plus all the required networking gear and software.

While our requirements were staying level, in other words, Moore’s Law ground relentlessly onward. Since we didn’t need what was new, prices went down, down, down. That’s why this year’s COMDEX looks like an episode of “Inspector Gadget.” We didn’t need anything else (and most of us didn’t need the gadgets).

Unfortunately, neither the economy nor shareholders accept excuses. Lower prices mean lower sales, and lower sales mean lower profits, declining markets, and recession for the PC business. It was all hopelessly predictable — so why didn’t we predict it?

Of course, opportunities remain. Tommy is going to have a Merry Christmas because I’m going to pay him to install the network. Next Christmas the kids will probably be asking for flat-panel monitors of their own and optical mice. We’re going to want full-rate (7Mbps) DSL, too, as soon as we can get it.

But all this can wait — and remember, we’re a pretty high-tech bunch here on Winter Avenue. Most families still don’t need shared networks. Many are becoming fairly blasi when it comes to the Internet. The idea of ripping MP3s onto CDs is to get away from the computer, to take the music with us.

Sure, home technology will continue to evolve. But it will evolve through the path of consumer electronics, disposable plug-and-play devices. The 20th-century habit of tinkering under the PC’s chassis, of oohing and aahing over the latest little tweak, seems to be over.

It’s a huge adjustment. Consumer desires are now driving the technology train rather than the capabilities of hardware or software. It’s a hard new environment. The industry will require time to adjust.

So why are we surprised?

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