Will the PC Go the Way of the Dinosaur?

French consumers aren't rushing to buy the latest, fastest computers, and handhelds are looking more seductive

In this day and age, new technology developments change consumer habits overnight. Even objects and machines that have become household names over the years risk extinction as new objects move in to replace them.

Looking at figures from the market research group International Data Corp., the PC may be on its way to becoming one such dinosaur. With the exception of Asia, PC sales are down worldwide. According to IDC, the computer market in France last year was stagnant, with a 0.1% increase in volume and a 3.2% rise in value. And sales actually dropped for office computers and servers.

IDC figures indicate that roughly 3.6 million PCs were sold in France in 2000, whereas 3.8 million were sold in 1999. In terms of servers, 121,000 were sold in 2000 and 145,000 in 1999. And what actually helped keep PC sales afloat was the success of laptop computers, since they are more adapted to today's mobile culture.


  And although changing preferences are affecting the popularity of big and bulky PCs, many other factors help explain why the traditional PC market has performed so poorly in France. Part of the reason is that most companies invested in fewer computers last year since they had already replaced all their old computers with new ones in 1999 in anticipation of the Y2K bug.

And consumers lost their incentive to buy PCs in 2000 as the high dollar drove up prices and put an end to the sub-$1,000 PC. And for the 30% of homes in France that actually do have PCs, getting a newer, faster computer is no longer as necessary or as tempting as it once was.

Indeed, despite the fact that the power of PCs continues to double every 12 to 18 months, it is, nonetheless, hard to justify the purchase of a new computer for those that already have one. On a daily basis, most people need their computers for basic word processing and for Web surfing. These users will hardly notice a difference between a 600 MHz computer from last year and the 1,000 MHz PC just out this year.


  In fact, even a two- or three-year-old computer is powerful enough to meet the needs of most computer users. That's probably why the Pentium IV Intel processor, launched six months ago, exists in 10% of PCs, whereas its predecessor, the Pentium III, appeared in 30% of all computers worldwide only six months after its launch.

And alternatives to buying a new computer even exist for those who need more power, such as video-game aficionados. With a graphics card, which ranges from between $143 and $429 in France, consumers can boost a dusty old computer and make playing even the newest video game easy and smooth. Of course, anyone attempting to make such improvements, which involves changing internal peripherals, must have at least some computer knowledge.

But it's precisely the lack of computer knowledge common among novices that partially explains misgivings about purchasing a computer in the first place. So that the maximum number of people can take advantage of technologies like the Internet, however, manufacturers are proposing a growing number of alternatives to the standard PC.

And these have the advantage of being just as easy to use as everyday devices like telephones or microwave ovens. These include, for example, the Sony/Intel Web palette, personal digital assistants, and WAP cell phones with Internet access.


  And these are quickly becoming a success among consumers. "The large demand among mainstream consumers was more volatile at the end of the year and moved toward products like electronic agendas and pocket PCs," explains Jean-Philippe Bouchard, head of the micro department at IDC France.

The trend is clearly going in the direction of pocket devices. In France, Alcatel's Web Touch One and the Web Touch Easy are typical examples of new-generation Web terminals that will hit the mainstream in the coming months. The Web Touch One, $486, is an all-in-one handheld device that includes all the newest cell-phone functions, Minitel services, and Internet access, including e-mail.

The Web Touch Easy costs $286 and allows users to surf the Web. It includes a color screen and an ergonomic keyboard. By connecting the device to a telephone line, users can access the Internet within just seconds. But with technology zipping at its current rate, even these devices may seem like dinosaurs as little as a year from now.

By Hai Nguyen

Translated by Inka Resch

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