Stores turn over PCs now in 90 days

AS I CONDUCTED my regular pilgrimage to the Big Box store circuit this week, one of the lads there was actually civil enough to strike up a conversation with me as he tried to convince me that a marked-down floor demo box was a good deal. Example: A HP Media Center tower, 1 GB RAM, 250 GB Serial ATA drive, $610, no drives, no cables, no docs. He was kind enough to point out that it didn't have Microsoft XP Media Center on it. When the drives were swapped out on it, it was loaded with XP Home Edition.

According to the chap, the store staff was gearing up for the standard end of the quarter slog. Every 90 days without fail, all of the PC models are cleaned off the shelves, typically at a 30 per cent store/chain discount from list price, to make room for manufacturer's next-generation latest models with bigger hard drives, a few more feature tweaks thrown in, and maybe some shiner plastic. They end up losing money every quarter, but they have to flush the inventory to make room for the newest/latest/greatest.

It's a brutal pace of inventory turnover and desktop PCs aren't profit centres anymore. For example, Best Buy's just announced fourth quarter profits were up 13 percent, coming on holiday sales of holiday sales of flat-panel televisions, MP3 players and notebook computers. High-end TVs are where the big bucks appear to be at; Best Buy is going to find precious shelf space for HP's flat-panel TVs, marking the first time in about a decade that a major U.S. brand name is returning to - rather than leaving - TV sales with a major retailer.

With a finite amount of shelf space at Big Box stores, the vanilla desktop tower may soon find itself under pressure to leave. HP has already started to pimp a smaller desktop box that's about roughly between a half and a third the size of their standard desktop tower. If you can downsize the desktop tower, you also proportionally downsize the packaging, meaning that you can fit the same number of units in a smaller space and thereby freeing up the space for something more profitable, like a big-screen TV. Of course, I said something equally profound and prophetic last year, so what do I know.

Apple understands the meaning of small when it comes to desktop space. The company has had to fight for shelf-space, so a Mac Mini and the latest iMacs make perfect sense from both a consumer perspective as well as from a stocking one for the Big Box owner. Small also makes shipping and handling cheaper, regardless of how you move your PCs.

Finally, the classic tower just doesn't fit very well into a stereo rack or underneath the telly. If you take the Mac Mini form factor/design, you can almost literally Velcro the thing under a shelf without a lot of effort. While current-issue Mac Minis don't currently have TV-in, it's not a big stretch to see one down the road, possibly dropping a pair of the USB ports in exchange for a TV tuner. One also might see a shiny little converter box that fits on top of the Mac Mini, with TV-in and USB-out, with some circuitry and firmware in the middle for handling video conversion. µ