Happy Holidays?
A Mid-Quarter Assessment of 4Q07
By Roger L. Kay
It's amazing, but after all this time, the doddering old long-in-the-tooth PC market still seems to
be rocking along. How could that be? Wasn't it only two years ago that consumer intent-to-
purchase had shifted away from the boring PC onto new phones, mp3 players, GPS systems,
and a host of other small and sparkling objects?
Well, that was then, and this is now. A recent study of consumers’ intention to buy PCs done by
Investor’s Business Daily and TechnoMetrica (the TIPP Home Computer Purchase Outlook
Index, October 2007) shows that, in the hearts and minds of buyers for this holiday, the PC is
still near and dear. Particularly notebooks. Big time. Shipments were up in healthy double
digits in many parts of the world in 3Q07, and all signs are looking good for a strong fourth
quarter. So, what accounts for this rekindled love? Even though exuberance is by its nature
irrational, there must be something behind it.
A number of forces have been working together to reinstate the PC as an object of consumer
desire, chief among them digital media. The wholesale switchover from analog to digital is
today in mid-throes, and within a few short years, all media will be nothing more than strings of
ones and zeros of varying lengths.
In music, Apple managed to convince everyone that audio should be digital, swinging the entire
music industry around to the company’s point of view and capturing a healthy share of the
available dollars in the bargain. And although Apple was the first to demonstrate the principles
of digital music successfully, others — Amazon, Yahoo, among them — have quickly followed
suit.
Video is in mid-conversion from celluloid and TV tuners to digital forms. Video differs from audio
in that video files are much bigger, sometimes by as much as two orders of magnitude. And
while audio fits neatly within the constraints of existing technological capabilities, video is
something else entirely. Full-screen, full-motion video taxes virtually every part of the ecosystem,
from bandwidth to processors to hard drives. This is tremendous news for computer makers
and their suppliers. We consumers actually need as much technology as we can get and more
to handle the number one job we want done: video play, especially live and streaming.
Still pictures, essentially a special case of video, have also all but converted to digital. The
space on the shelf in photography stores devoted to film diminishes by the day. Most cameras
are already digital, and soon all will be. Pity my personal investment in those gorgeous steel-
shanked pre-auto-focus Nikon lenses — the fixed 20mm and 300mm, particularly. They have
beautiful optics, but fit only my FE2 body, now a dinosaur of the silver-halide era.
Thus, it is as a media organizer and player that the PC has regained central relevance among
consumers. There are other factors at work as well. Despite stock-market turbulence,
consumers remain fairly well off this year. They have money to spend. Also, due to Moore’s Law
and economies of scale, PC prices continue to decline while capabilities rise. The general
move over to mobility is a contributing factor as well, with mobile broadband (essentially, data
over cell phone connections) helping out in a big way. Consumers who may have owned
desktops in the past are now turning to mobile systems as they approach desktops in
performance and price. And, with their letter-box geometry, wide-aspect-ratio screens have
given mobile computers the air of movie theaters.
Vendors continue to compete, offering better, more-heavily-configured systems, attractive
designs, and great bundles. The combination of Web shopping and wide retail distribution also
helps. People can research online and buy right there or go look and feel in retail stores, where
they can take the product home the same day.
That the PC is back with such force may seem surprising at first, but weighing the context,
history, and current circumstances should cause the shock and wonder to dissipate somewhat.
Over the past nearly 30 years, the PC has always been capable of doing some of the tasks at
hand, but not quite good enough to do others. As its capabilities have increased, so have the
demands placed on it by buyers. We are in a period when consumers want PCs to create,
organize, and play media, and the available hardware, software, and services are just now up to
the job.
© 2007 Endpoint Technologies Associates, Inc. All rights reserved.
be rocking along. How could that be? Wasn't it only two years ago that consumer intent-to-
purchase had shifted away from the boring PC onto new phones, mp3 players, GPS systems,
and a host of other small and sparkling objects?
Well, that was then, and this is now. A recent study of consumers’ intention to buy PCs done by
Investor’s Business Daily and TechnoMetrica (the TIPP Home Computer Purchase Outlook
Index, October 2007) shows that, in the hearts and minds of buyers for this holiday, the PC is
still near and dear. Particularly notebooks. Big time. Shipments were up in healthy double
digits in many parts of the world in 3Q07, and all signs are looking good for a strong fourth
quarter. So, what accounts for this rekindled love? Even though exuberance is by its nature
irrational, there must be something behind it.
A number of forces have been working together to reinstate the PC as an object of consumer
desire, chief among them digital media. The wholesale switchover from analog to digital is
today in mid-throes, and within a few short years, all media will be nothing more than strings of
ones and zeros of varying lengths.
In music, Apple managed to convince everyone that audio should be digital, swinging the entire
music industry around to the company’s point of view and capturing a healthy share of the
available dollars in the bargain. And although Apple was the first to demonstrate the principles
of digital music successfully, others — Amazon, Yahoo, among them — have quickly followed
suit.
Video is in mid-conversion from celluloid and TV tuners to digital forms. Video differs from audio
in that video files are much bigger, sometimes by as much as two orders of magnitude. And
while audio fits neatly within the constraints of existing technological capabilities, video is
something else entirely. Full-screen, full-motion video taxes virtually every part of the ecosystem,
from bandwidth to processors to hard drives. This is tremendous news for computer makers
and their suppliers. We consumers actually need as much technology as we can get and more
to handle the number one job we want done: video play, especially live and streaming.
Still pictures, essentially a special case of video, have also all but converted to digital. The
space on the shelf in photography stores devoted to film diminishes by the day. Most cameras
are already digital, and soon all will be. Pity my personal investment in those gorgeous steel-
shanked pre-auto-focus Nikon lenses — the fixed 20mm and 300mm, particularly. They have
beautiful optics, but fit only my FE2 body, now a dinosaur of the silver-halide era.
Thus, it is as a media organizer and player that the PC has regained central relevance among
consumers. There are other factors at work as well. Despite stock-market turbulence,
consumers remain fairly well off this year. They have money to spend. Also, due to Moore’s Law
and economies of scale, PC prices continue to decline while capabilities rise. The general
move over to mobility is a contributing factor as well, with mobile broadband (essentially, data
over cell phone connections) helping out in a big way. Consumers who may have owned
desktops in the past are now turning to mobile systems as they approach desktops in
performance and price. And, with their letter-box geometry, wide-aspect-ratio screens have
given mobile computers the air of movie theaters.
Vendors continue to compete, offering better, more-heavily-configured systems, attractive
designs, and great bundles. The combination of Web shopping and wide retail distribution also
helps. People can research online and buy right there or go look and feel in retail stores, where
they can take the product home the same day.
That the PC is back with such force may seem surprising at first, but weighing the context,
history, and current circumstances should cause the shock and wonder to dissipate somewhat.
Over the past nearly 30 years, the PC has always been capable of doing some of the tasks at
hand, but not quite good enough to do others. As its capabilities have increased, so have the
demands placed on it by buyers. We are in a period when consumers want PCs to create,
organize, and play media, and the available hardware, software, and services are just now up to
the job.
© 2007 Endpoint Technologies Associates, Inc. All rights reserved.
Consumer PC Sales Remain Strong
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