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-------------------------------------------------------------- This story was printed from ZDNet Australia. --------------------------------------------------------------
Opinion: If PCs are whitegoods, retailers should be petrified

By Alex Kidman, 0
June 26, 2002
URL: http://www.zdnet.com.au/news/communications/soa/Opinion-If-PCs-are-whitegoods-retailers-should-be-petrified/0,130061791,120265978,00.htm


If PCs are whitegoods, retailers should be petrified

COMMENTARY--Every once in a while, someone sends me an message reminding me, in essence, that PCs now have status as whitegoods; they're meant (at some level) to be a basic commodity that everyone should have access to.

That's quite a noble statement; I'm certainly not opposed to the concept of everyone having access to a PC. For the retail PC industry, though, there is a darker side to the whitegoods concept.

People buy whitegoods with the idea that they'll last. I've had my fridge now for a number of years, and it does what I need it to do; keep things cool. PCs, if treated reasonably well, can last a similar amount of time, but that wouldn't suit the profit forecasts of most PC manufacturers. In order to maintain margins, you need to sell a lot of systems, and keep the punters coming back to make their systems faster. This in turn should keep your bank balance suitably healthy.

The problem is that as computers have become more mainstream, people have settled into what it is that they do with their PC, and for the most part, that's amply met by existing computer power. My mother, for example, has a PC that runs at less than one tenth the speed of Intel's latest processor, but she only uses it for simple word processing tasks, so it suits her needs. Presuming she doesn't take to the innards with Mr Sheen, it'll probably last her for a good many years. And she's not alone in this; there are plenty of people out there who only update their equipment when that last vital, no-longer-replaceable part burns out. Another relative of mine still runs a system that was current in 1987.

The classic reason for this market segment to update has been the so-called "killer app" that drives migration to a newer, faster platform. Various categories of software have definitely been the killer applications of their time; from Doom to Windows 95, people have moved up the technology ladder because their old systems just don't cut it any more.

The problem is, for a lot of single users (leaving out the corporate space, where the rules are definitely different), there's not a lot on the horizon that meets that killer application criteria. If a 400MHz system runs your MP3s, email client and web browsing well enough, why spend thousands of dollars upgrading your whitegoods PC?

To throw up one example, broadband was meant to drive the need for faster multimedia PCs (all that rich but possibly-not-legal video content), but at least in the Australian market space, broadband is a screaming mess. Optus launched with promises that it wouldn't meter or appreciably cap download speeds, because such things didn't represent "good value" to customers. Fast forward a few years -- and take a hefty dose of commercial reality -- and the caps and meters are firmly entrenched on the Optus side of the fence. Over at Telstra, there's a mire of often-dead equipment, rewrites of user agreements that happen faster than the average download and an awful lot of angry customers. Actually, there's fewer of those than there used to be, but only because there seem to be fewer customers. Add to that the still very limited reach of broadband in Australia, and there's little incentive to lay down the dollars for a broadband service, let alone a PC upgrade to handle all that so-called 'capacity'.

Windows XP, too, was meant to usher in waves of PC purchasing. It certainly isn't possible to argue with the system requirements of XP, which require much heftier systems than previous versions of Windows. It appears, however, that many people aren't even taking up the argument; they're just sticking with their existing operating systems and PCs. Six months down the track, with a promised but yet to be delivered service pack, and a raft of program incompatibilities, I see their point.

There will always be enthusiasts on the cutting edge who'll pick up snazzy new systems, be they graphics artists, gaming freaks or video editing enthusiasts. But the enthusiast market isn't a whitegoods market -- that's a space where building your own is a badge of honour, and the concept of buying goods over the Net is much more appealing than wandering into the local electronics store.

Is there a killer application that home users are -- or should be -- adopting that can drive high-end PC sales? Or are people content with what the PC offers them now? What do you think?


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