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The PC industry is stagnant

On the Mohney Pond life
Tue Nov 28 2006, 09:59
PROBABLY THE BEST bellwether indicator that the PC industry is stagnant this season is the foaming and thrashing over the new game consoles.

In the States, you can buy a Sony PlayStation 3 for around $600 and then flip it on E-bay for $1000 or more. I personally saw one unit change hands at $1300 - it went to a specialty games shop that was stocking up units in anticipation of a Christmas drought. The owner is betting supply is so tight that parents and game junkies are going to start bidding back up this-minute-or-so $1000 Ebay average closer to December 25, so he'll be able to resell the unit at a tidy profit. He's even had some units purchased in and shipped from Japan. Some people are hard core and have no fear of tackling a PS3 in the original Japanese just so they can brag about it to their mates.

If Sony had been smart, it would have put the first 10,000 to 25,000 units on EBay and tried to suck every last penny out of each unit sale. Instead, some reports say the company is losing money on every unit and hopes to make it back up between games, on-line play, and Blu-ray movie sales. The theory sounds a bit crazy until you compare the price and parts of a PS3 to the list price of a Sony Blu-Ray player. Sony wants $1000 for a vanilla Blu-Ray player, but only $600 for a 60GB PS3 console. What is wrong with this picture?

Compare that to the gimmicks being used to move laptops and desktops these days. The traditional "Big Box" trio of Best Buy, Circuit City, and CompUSA now have to fight Office Depot, Staples, and Wal-Mart in selling the same fundamental products. Wal-Mart is perfectly happy to sell you a $299 laptop, because if you buy one and start looking at some of the other deals on the way out, you might come back on a regular basis to stock up on such mundane essentials such as socks, detergent, dog food, and tyres.

With the basic capacities of PC add-ons outgrowing the abilities of people to use them, there's only so much PC gear the average Joe can buy. Let me put it another way: How many 500GB or 750GB disks do you think you'll be buying for personal use in the next twenty-four months? Note I said PERSONAL USE. If any of you have said more than "two," please e-mail me now because I really can't understand how you expect to watch all that porn in your lifetime without every leaving the house again.

I was flipping through the latest HP catalog mailer and HP's idea of a unique laptop product feature was an optional "HP Imprint Finish," described as "a polished coating with a subtle wave pattern. The sturdy exterior protects against rough handling." I don't mean to pick on HP (too much), but if you start talking about what the outside of the laptop looks and feels like, next I expect to hear Ricardo Montalban talk about Dell's soft Corinthian leather.

About the only real excitement coming out of the PC world these days is whenever Steven Jobs cranks out a new idea and gets all of his lapdogs in the mainstream media to rollover for him. Now that Apple has switched to Intel chips, I'm not sure how many new tricks Steve has left, other than to open source the Mac OS and bring back Woz to build a $100 Mac laptop for the world's poorest children. µ

See Also
Console price war looms


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