The Great PC Slowdown?

It is there in the headlines. It is there in the main pages. It is as if a

disaster of unimaginable proportions has struck. PC sales’ growth is slowing

down. Is the PC dying? Can it be revived? Is it already dead? If the PC were

indeed dead, what would the next great thing be?

Is it as bad as it sounds? Let us first understand what the news items are

saying. They are not saying that the PC sales are going down. They are saying

that the growth rate of PC sales (or purchases, depending on the way you look at

it) is slowing down. That is, if a hundred more PCs were sold last year when

compared to the previous, then this year, instead of selling a hundred and fifty more than last year, perhaps only a hundred and twenty-five

more will be sold.

But, have no fear. This means that still more PCs will be sold this year than

were sold last year. Moreover, all the data used pertains to the US only, and

not to the rest of the world. Closer home, early estimates from IDC (India)

suggest that the situation is much more comfortable, with only a small,

short-term dip in PC sales. Unfortunately, the IT industry is more prone to hype

than most others, only this time around, it has worked in the reverse. And, we

in India just repeated what we heard being said in the West without looking for

the why’s and the where’s–how so like us!

Will there be any impact on us in India? Yes and no. As I said, India is

still continuing to see good growth. But the multinationals have started cutting

back plans and budgets for their Indian operations. I wonder if there is any one

bold enough to go the other way and try to push harder here, to make up for what

they could not in their home country. If there is none, then local brands and

assemblers should see some easing off of competitive pressures.

But let us not underestimate the impact this slowdown is having in an

industry that is used to double-digit growth figures. Almost all PC majors are

taking a hit on their bottom lines and are scrambling to work their way back.

But this effort has not been very visible. What has been visible is that almost

every one of them is trying to get their share of the gadgets’ pie. Microsoft

wants a piece of gaming. Compaq is into MP3s, PDAs and what not, and Apple is

busy positioning itself as the digital hub for all these new devices. Even Intel

is getting into music players.

If all of them are shifting their attention to consumer gadgets, then would

it be that the question we asked earlier–that the PC is finally dying–is

true? I don’t think so. In the past issues of PC Quest we have discussed how

gadgets would take over much of what a PC is doing today, and how the PC would

become more of a content-creation tool. What we are seeing now is just that

happening. And the message is getting amplified because of the unexpected

slowdown in sales’ growth, repeat, sales’ growth (and not sales), of PCs.

Before I end, there is one modification to a promise we made to you last

month. We had promised a new design for PC Quest in March 2001. However, since

April marks the birthday of PC Quest, many of us, including some readers, felt

that April is a better time to roll out the new look. So, you will see a

redesigned PC Quest in April 2001. I am sure all of you who have worn new

clothes on your birthday will understand the change in schedule.

Krishna Kumar