Pretty bubbles in the air

So how was it for you? Business I mean, over, say, the past six months? Why I ask is that I seem to hear the almost imperceptible ping of bubbles popping. And, if it's champagne, then it's probably some South Sea vintage bottled many moons ago. Victorian businessmen knew all about South Sea bubbles - those glistening investment pearls that turned out to be as ephemeral as they once seemed irresistible. This time, though, I suspect it might be the PC industry's bubbles about to go pop, if not those of the entire industrialised world.

I'm not the only cheerful soul around, nor - kind of you to ask - does my sunny disposition have anything to do with my recent root canal surgery.

A City columnist has recently noted how, on Wall Street, the prevailing mood is reminiscent of the 80s, when bullish dealers sported Gordon Gekko braces and spent fortunes on Porsches and high living. Then the recession bit into their Armani-clad asses. The good times were over and with them went thousands of jobs in the IT industry.

Today, Digital Equipment is just one company looking back wistfully to the days when its shares were among the IT sector's most actively traded.

Now, we hear, Fujitsu - one of the world's top PC manufacturers, don't forget - is thinking of getting out of the Dram business because of plummeting prices, a corresponding glut in chips and, more significantly, a global slowdown of sales in PCs. Hitherto, Fujitsu would have wanted the whole cake, from memory chips to printers, but its honing down of a key manufacturing area could be symptomatic of a wider industry malaise.

In the US, Bill Gates is similarly warning shareholders not to expect the same staggering returns they have previously enjoyed, despite his predictions that two-thirds of US homes will have a PC by 2001, of which 85 per cent will be hooked to the internet.

The vulnerable underbelly of such widespread adoption, of course, is that sales not only of PCs, but of software too, are nearing saturation point. Windows 98 with its Universal Serial Bus support should stimulate demand for PC peripherals, particularly storage devices such as DVD.

But in the longer term, the bulk demand from the PC-buying public remains obstinately for machines able to manage simple word processing, spreadsheet and database applications.

While the internet might ostensibly open up a fourth PC-buying market, it could easily lose its edge once Web TVs start competing. And as for dealers selling into the corporate market, the advent of network computers can only further question the long-term viability of PCs.

But, as Nostradamus would say, enough of being irredeemably cheerful.

There's another catastrophic recession to look forward to, plus the year 2000 making computers crash faster than Canary Wharf executive lifts. Time to liberate the bubbly and enjoy the reassuring sound of Chateau South Sea bubbles popping. All together now - Ping!

Dave Evans is a freelance IT journalist.