"Realistically the iPhone isn't an ideal ebook = platform.=20 The screen is far too small and the battery life too short. All of the = serious=20 ebook competitors use e-ink displays with battery lives measured in = days, not=20 hours."
-- Reader=20

New=20 iPhone e-book application takes aim at Amazon's Kindle

Venture Deals

3TIER=20 lands $10 million to help locate wind, solar and hydro projects=20
BlueKai=20 gets $10.5 million to help advertisers target shoppers=20
Yapta=20 raises $2.7 million to develop new airfare tracking features=20
Helping=20 to treat glaucoma in dogs, Healionics scores $2.6 million=20
Valley=20 firms back DotNetNuke

VIEW=20 ALL

Pink Slip Watch

CellCyte's=20 cash dwindles to less than $6,000, operations suspended=20
Trails.com=20 closing Seattle office, founder says decision 'bittersweet'=20
Troubles=20 in Detroit hit the Cobalt Group, which trims staff by 4 %=20
Youth=20 sports programs missing funds, say Bellevue firm failed to pay
High-tech=20 layoffs on the rise

VIEW=20 ALL

Microsoft's New OS

What=20 to watch in Seattle tech in '09=20
Mysterious=20 Windows 7 Beta link stirs new speculation about early release=20
Study:=20 Economy will prompt many companies to skip Windows Vista
Speculation:=20 Windows 7 Beta at CES=20
What=20 to ask at Microsoft's annual meeting -- and what not to ask =

VIEW=20 ALL

Bill Gates Watch

Endangered:=20 The newsstand where Microsoft was born=20
Ballmers,=20 Gateses give combined $200k to Obama inauguration=20
Top=20 10 Microsoft Videos of 2008=20
Bill=20 Gates on the economy, education=20
Bill=20 Gates on CNN's Situation Room

VIEW=20 ALL

BLACK=20 FRIDAY=20

PC shoppers bask in holiday deals as Microsoft, = computer=20 makers struggle

By Todd Bishop on = November 28,=20 2008 at 7:16 PST

Comments=20 (1) | Permalink

Personal=20 computers | Steve=20 Ballmer | Windows=20 | MSFT=20

Microsoft and computer makers are facing one of their most = challenging=20 holiday seasons in years as a result of the troubled economy, a shift = toward=20 lower-cost portable computers and the gap between major Windows=20 releases.

The only real question is how bad it will get for them = -- and=20 how low PC prices will go for consumers.

=E2=80=9CFor consumers, = PCs are almost=20 entirely discretionary, particularly if you already have one,=E2=80=9D = said industry=20 analyst Roger Kay, president of the Endpoint Technologies Associates = market=20 research firm in Wayland, Mass. =E2=80=9CThe decision to upgrade can be = pushed=20 arbitrarily into the future.=E2=80=9D

The stakes are high for the = industry as=20 shoppers head to the stores. The fourth quarter is typically the biggest = for=20 personal computers. Last year, for example, the quarter was responsible = for 29=20 percent of annual worldwide business and consumer PC shipments, = according to the=20 IDC market research firm.

Consumers will encounter deep = discounts as PC=20 makers and retailers seek to maintain their sales volume, said analyst = Tim=20 Bajarin, president of the Creative Strategies Inc. technology-consulting = firm in=20 Campbell, Calif. He cited prices below $500 for laptops with good=20 specifications, significantly less than in years past.

[Related post: Top=20 tech deals for 'Black Friday']

=E2=80=9CYou=E2=80=99re going = to have the best prices=20 on PCs and notebooks that we=E2=80=99ve ever had for the holiday = season,=E2=80=9D Bajarin said.=20 =E2=80=9CIf you=E2=80=99ve lost a job and you don=E2=80=99t have the = money to buy, that=E2=80=99s not a=20 consolation.=E2=80=9D

People in the market for PCs might want to = wait until at=20 least mid-December to see if prices drop further as the industry tries = to clear=20 out inventory, Bajarin said. As is the tradition, prices should go even = lower=20 the week after Christmas, he added.
IDC was still in the process of = lowering=20 its projections for the holiday season as of earlier this week, = adjusting to the=20 rapidly changing economic environment.

For the United States, = IDC=E2=80=99s=20 preliminary numbers now project a 1 percent decline in PC shipments for = the=20 fourth quarter, when compared with the same quarter last year. IDC = previously=20 forecast a 6 percent increase in shipments for the quarter, said analyst = Richard=20 Shim, IDC research manager, in an email. The revised forecast also will = show the=20 average selling price for computers declining = =E2=80=9Csubstantially,=E2=80=9D Shim=20 said.

PC sales trends are critical for Redmond-based Microsoft = Corp.,=20 which makes most of its Windows revenue from copies of the operating = system=20 preinstalled on personal computers. During an Oct. 23 conference call, = the=20 company predicted worldwide PC shipment growth of 10 percent to 12 = percent in=20 the current quarter.

Since then, however, there have been signs = that the=20 market has worsened, indicating that growth in worldwide PC shipments = could be=20 lower than Microsoft expected.

On Nov. 12, for example, Intel = lowered=20 its fourth-quarter revenue projections to about $9 billion, from the = previous=20 estimate of at least $10.1 billion. The microprocessor giant, a key = Microsoft=20 partner, cited =E2=80=9Csignificantly weaker than expected demand in all = geographies and=20 market segments.=E2=80=9D

Addressing shareholders at = Microsoft=E2=80=99s annual meeting=20 last week, CEO Steve Ballmer said the company=E2=80=99s strong financial = position puts=20 it in a better position than most to weather the economic storm.=20

However, he added, =E2=80=9Cour industry and our company will = not be immune=E2=80=9D to=20 the turmoil.

Ballmer said Microsoft is looking at all parts of = its=20 business for ways to cut costs, including slower job growth.

He = didn=E2=80=99t=20 address PC projections, but the market is pivotal to Microsoft=E2=80=99s = results.=20 Microsoft=E2=80=99s Client division, which makes Windows for PCs, = reported nearly $3.4=20 billion in operating profits in the 2007 holiday quarter =E2=80=94 more = than half of=20 Microsoft=E2=80=99s companywide operating profits for that = period.

However,=20 there=E2=80=99s no new Windows version to stir extra interest in PCs = this holiday=20 season. Microsoft released Windows Vista to consumers in January 2007. = The next=20 version, Windows 7, could be on the market in time for the 2009=20 holiday.

In addition to the economic turmoil affecting the volume = of PC=20 sales, Microsoft is feeling the effects of the shift toward = =E2=80=9Cnetbooks=E2=80=9D =E2=80=94=20 low-cost computers designed primarily for web surfing and other = low-intensity PC=20 tasks. Examples include the Asus Eee PC and the One Laptop Per Child=20 initiative=E2=80=99s XO computer.

Bajarin, the Creative = Strategies analyst, said=20 he expects netbooks to do particularly well this holiday=20 season.

That=E2=80=99s not necessarily good news for = Microsoft. The=20 open-source Linux operating system competes more aggressively against = Windows on=20 netbooks, due in part to their lower hardware specifications. And when = Windows=20 is installed on those machines, it=E2=80=99s not as lucrative for = Microsoft, because the=20 average selling price is lower than on traditional = notebooks.