A PC salesperson in a local chain retailer recently disclosed the real reason he steers customers towards a particular system. Why? Is it the highest margin, best price performance or biggest spiff? No, it is because the on/off switch had the highest quality feel of any in the store, if the switch is that good, the rest of the product must be equally good.
Stupid? No, not really. All PCs have a processor, memory, screen, and mass storage, and frequently these components are so similar that we need to be expert to find any differences. You are a rational, professional, experienced industry expert, so you would never make a recommendation on that basis.
Really? How did you choose the model of car you drive, was it because it has four wheels, an engine, seats and a steering wheel, or was it because the doors shut with a good thunk, the switches are a tactile delight and the packaging of the components meets your needs for practicality and self image?
In the 20 years that it has been possible to buy a PC, 70 per cent of households and a significant number of office-based workers have decided they do not need to buy the appliance that drives our industry. Is this because we do not have enough mega-whatever in the box, or is it because the product doesn't appeal?
So how do you go about generating this appeal? Price is an element, but nobody buys something simply because it is cheap. The industry needs to design its products with more consideration for the rational and emotional needs of customers. Since they have different needs, it follows that there must be a wider variety of products.
Technical innovation alone will not help. All cars, except that pink Rolls-Royce driven by Lady Penelope, have four wheels - Reliant owners may address their comments to the editor - and systems will have the same components. What will change is the packaging and presentation, price levels and the variety of styles offered.
This process has already started. Palmtop machines are now acceptable with Psion systems and the Palm Pilot is shipping in quantities large enough to be visible in the PC market. Handheld computers now have the functionality to be useful on the road. Twenty years ago the launch price of the Commodore Pet home computer was #1,200, and today an average system costs the same. Certainly there is no comparison in functionality and inflationary effects need to be taken into account, but PC prices must fall from this level.
Real competition in the CPU market has already led to a reduction in processor prices, and the major PC manufacturers have legitimised the lower price PC. These first generation low-cost systems are just larger PCs with reduced specs to achieve the low price. The next generation of low-cost products will have architecture, design and packaging more closely targeted at this sector. It will become a significant part of the market.
At home, the needs of PC gamers and the availability of new 3D enabled CPUs will drive a new 3D-system segment. The reality of 3D and intensity of 3D games will be stunning. In the home PC market, Christmas 1998 will be in 3D.
In the past there has been a single architecture for desktop PCs, socket 7. The launch of the Pentium II has brought slot 1 architecture. This offers no benefits over socket 7 in uniprocessor systems and now socket 7 has been enhanced to include a 100MHz bus and AGP port, this Super 7 architecture will continue alongside slot 1.
Other architectures will emerge during the year to allow PC manufacturers to build different systems in different ways at different price performance levels, tailored to the needs of the user.
So what does this mean for a PC dealer? A more fragmented market with products better targeted at the rational and emotional needs of specific consumers. Systems that are matched to the needs of the customer are easier to sell, and these make the market grow.
Different system architectures are tailored to the needs of a particular application and enable freedom of competition among suppliers. This competition will reduce prices and produce a wider variety of systems for customers. The PC business is moulding to the needs of customers, and it is good news for the channel.
Maybe my friend in the retail store will no longer need to identify the difference between systems with the quality of the on/off switch.
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