Advertisement
  1. Archive

Tough sell

Checking out new PCs is getting to be a lot like looking for a new car. Your old vehicle runs fine and gets you where you want to go. Still, you like to see what the shiny new models have to offer.

Under the hood, new PCs have more power and speed, and prices are low enough to avoid sticker shock. But that's clearly not enough to persuade many people to go beyond kicking the tires. They've decided that the old clunker PC at home is just fine, thank you.

"You get about the same level of performance and more so-called features" in new PCs, said Roger Kay, director of client computing at International Data Corp., a market research company. "But most PC users only want a limited set of features."

Buyers expect a whole new experience if they trade up to a new model, Kay says, including new and different activities, and machines that are easier to use and more convenient.

Wait a minute, Intel and Microsoft say. Intel boasts about the speed and power of its new Pentium 4 chips. And Microsoft thinks its new Windows XP delivers on its promises. Microsoft has loaded the new operating system with features for popular functions such as digital music, photos and instant messages (all designed, of course, to lure users into doing more business with Microsoft and its commercial partners). It also has created a system with more stability and reliability.

To back it up, Microsoft and its partners will spend up to $1-billion on a marketing campaign for Windows XP to try to revive hopes for holiday sales.

It may prove a hard sell. What people are doing with their computers remains pretty much the same as it has for the past few years: surfing the Web, sending e-mail, playing games, handling digital photos and using programs such as word processors. Their machines handle all those tasks adequately.

So the 56 percent of American homes with computers may be satisfied with the equipment they have, and many of those who lack PCs apparently are satisfied to do without.

The economy's shakiness after the terrorist attacks in September only worsened what was already a significant slowdown in PC sales. For the first time, PC sales declined this year from the previous year.

"I think consumers are going to be cutting back pretty severely," said IDC's Kay, who expected to lower his company's already modest projections for holiday sales. "People are being conservative and cautious."

The market also has shifted from mostly first-time buyers to people looking for a second or third machine. Knowing the aggravation that inevitably comes in getting a PC up and running may make people gun-shy.

"Instead of seeing a new PC as a positive, they see it as a negative," said Rob Enderle, research fellow at Giga Information Group. "They don't need the performance, and they don't have two weeks to make it work right. That's a large dampening effect."

All the while, Intel keeps turning out ever-faster chips to power PCs. It released a 1-gigahertz chip in March 2000, doubled it to 2 gigahertz by last August, and showed off a 3.5-gigahertz model still in development.

The variety of chips and differing speeds can create confusion.

"I think that consumers are a little bit lost, especially because it's difficult for consumers to understand that gigahertz don't tell the whole story," said Anush Yegyazarian, senior associate editor at PC World magazine.

Video editing, games and other intensive tasks need more power and speed, but word processing, surfing the Web and other basic chores do fine on almost any chip now on the market. Understanding your computing needs now and what you may need later is important.

"Buy as much as you can afford," Yegyazarian said. "That's not because anything you're doing today, but what you choose to do tomorrow. If you foresee very little change in your personal habits, 1 gigahertz will probably take care of most your needs and you'll be quite satisfied with it."

What consumers may be waiting for is the next "killer app," an absolute must-have program or function that their current machines can't handle. XP fills at least part of the bill: It won't run on most machines made before 2000. Microsoft says XP will support 12,000 third-party devices, such as printers and scanners, as well as 90 percent of 1,500 software applications tested.

But it will require many people to buy a new PC to use it. And if printers, scanners and some software are too old, people will have to shell out even more money for replacements.

The PC industry is doing all it can to promote interest in activities that are likely to run better, or at least faster, on a more powerful machine. These include putting home movies on a DVD, burning music CDs and multitasking. (That's the juggling act, instinctive to many teenagers, that involves simultaneously surfing the Web, chatting with friends, listening to digital music and perhaps doing homework.)

"It comes down to the "wait factor,' " said Ralph Bond, Intel's consumer education manager. In an activity such as digital video editing, he said, a faster, more powerful computer "takes it from frustrating to much more fun."

Perhaps, analyst Enderle said, but digital video editing appeals mostly to a niche market of early adopters and "amateur experts" who like to spend time and money on it as a hobby.

"It takes a long time to move the main market," Enderle said. "It requires applications that are easier to use than they currently are."

PCmakers have one factor in their favor that has nothing to do with flashy new features or arcane technical capabilities. It's a pocketbook issue:

"Prices on high-quality systems are lower than ever before, lower than they really should be, to be honest," said Alan Stafford, senior editor at PC World magazine (www.pcworld.com). "The major vendors are really at each other's throats."

Rebates, free peripherals such as printers, and promotions such as free shipping have virtually wiped out profits for many companies.

While no major PC vendor has disappeared this year, the industry is clearly struggling. Ted Waitt returned to the helm at Gateway Inc. to try to revive that company's fortunes, and the Compaq brand will be gone if its proposed merger with Hewlett-Packard is completed.

Today's price-cutting competition means consumers may have little to gain in waiting for postholiday sales.

"After the blitz at Christmas, there isn't going to be a whole heck of a lot more (price cuts)," PC World's Yegyazarian said. "One basic reason: The companies can't afford it."

_ Information from Times wires was used in this report.

YOU MIGHT ALSO LIKE

Advertisement
Advertisement