Conference 7.286::digital

    Worldwide News                                             LIVE WIRE
  ============================================================================
       Retail PC focus shifts to business ...              Date: 29-Jan-1996
  ============================================================================
                Retail PC focus shifts to business customers;  
                   Starion home PC line to be discontinued  
 
         Digital today announced that it will redirect its efforts in the 
   retail sales channel to focus on the business PC customer.  The company
   said it intends to expand the availability of its Venturis desktop 
   and HiNote mobile PC lines to reach the individual and small 
   business customer through selected retail channels.  
         Digital will not continue its Starion home PC line, targeted to 
   a general consumer market, beyond models already in the U.S. market.
         "Digital is taking an even sharper focus on the commercial PC 
   market," said Bruce Claflin, vice president and general manager, 
   Personal Computer Business Unit.  "Digital's success in the PC 
   business has been fueled by the strength of our industry-leading 
   commercial lines, and we plan to grow by building on those strengths.  
   We will focus on the needs of the business customer, from individuals 
   and small businesses who require business productivity tools -- such 
   as word processing or Internet access -- all the way up to the largest 
   enterprise requiring high-performance clients and servers for mission-
   critical applications or commercial access to the Internet.
         "Consistent with this strategic focus on the business user, 
   Digital will center its retail efforts on customers who buy PCs for 
   home-professional or small-business applications," Claflin continued.  
   "Digital intends to be a leader in this segment, where we will best 
   leverage our advantages and differentiators.  We are excited about the 
   prospect of extending Digital's acclaimed Venturis desktop PCs and 
   award-winning HiNote mobile PCs to this market segment."
         Digital's Venturis desktop PCs and HiNote notebooks already are 
   widely accepted by corporate customers and larger businesses worldwide, 
   and currently are sold through dealers and resellers.  Digital plans 
   to optimize models from these product lines specifically for the home 
   professional and small business customer, and will sell through the 
   retail channels that best cover that segment.
         Digital will continue to fully support new and existing Starion 
   PC customers with technical support, access to parts and service, and 
   a three-year limited warranty.







                       FOR DIGITAL INTERNAL USE ONLY
 

Somebody better tell Paul Harvey to clarify his national radio statement 
today that "the PC industry is in another shakeout period - Digital is out of 
the PC business".  I have already had calls about this.  It sure would have 
been nice to have received an internal message about this rather then hearing 
it from Paul Harvey first and then have to come to the notesfile to find out 
what is happening.

Come on guys, the first rule of business is to communicate internally.

re Note 4391.2 by ALFSS1::nqsrv407.nqo.dec.com::Kevin Ryan:

> Somebody better tell Paul Harvey to clarify his national radio statement 
> today that "the PC industry is in another shakeout period - Digital is out of 
> the PC business".  

        As soon as I heard on the radio this morning that Digital was
        leaving the home PC business, I knew that many would read
        this as "Digital is leaving the PC business".

        I think that few in the computer business (and nobody in the
        general public or business) draw the distinction between
        "home PC" and "business PC" which we have tried to draw for
        about 14 years.

        If we're lucky, we've only shot one of our feet. :-{

        Bob

Although the Livewire article was dated Monday, I'm sure most employees didn't
see it before hearing the news in the media.

I heard the story on The Ten O'Clock News on WLVI Cambridge (channel 56) last
night.  There were not enough details in the story to tell exactly what was
going on.  The announcer said we would concentrate on selling PCs to small
businesses.

As an employee, I knew I could come to work today to find out the details.  If I
were a customer, I would be concerned about Digital's commitment to our PC line.

Paul

    
    
    I heard it on Paul Harvey first as well and he did say digital was
    getting out of the Home PC market.  Although what that meant was not
    defined at all.
    
    Mike
    market.  

    
    Yup,  I've already corrected 4 people this morning about this
    very issue. They all know I work for DEC. Their first comment
    was " I heard Digital is out of the PC market ". Good thing I logged
    in early this morning and read the announcement or I wouldn't have
    had a reply. One of these people was the principle of an elemetary
    school where my kids go to school. Not good, someone has some damage
    control to do.
    

    Acronyms ?
    
    BC's = business computers
    
    PC's = personal computers for home use
     
    PBC's = personal computers for business use
    
    Sell PBC's not PC's. 
    
    Before the PC, there was the BC.   Now there is the PBC.
    
    See ?
                

I watched and clearly heard one of the Boston TV stations report that we
are getting out of the PC business. Period. This was around 6:00 pm last
night.

Art

	When are we going to get better at stuff like this? I hate to
	say it, but our spin doctors need to go back to med school.

							mike

    
    Re: -1
    >>  When are we going to get better at stuff like this? I hate to       
    >>  say it, but our spin doctors need to go back to med school. 
     
    On the contrary, our PC division should have made a real effort in
    the PC retail area. Were'nt we supposed to be in the top 5 by 
    some-such-date? 
    
    You don't need spin doctors when you do what you say you're going 
    to do. [ oops! this should be in the accountability note ]
     
    jc 

RE: .10

	Doesn't matter. The decision to get out was made. The execution of
	the decision was poor. Our efforts or lack of in the retail PC space 
	isn't the issue I'm talking about.

							mike

    
    re: -1
    
    I agree and understand the issue. But it is the same issue, at the back
    end. 
    
    We decided to get in the retail market. The execution of the decision
    was poor, etc.
    
    jc 

    
    Why do we have to make this type of announcement to discontinue a model
    line? It states in the announcement that we are going to replace the
    Starion line with the Venturis line, quote follows:
    
      "The company said it intends to expand the availability of its 
      Venturis desktop and HiNote mobile PC lines to reach the individual 
      and small business customer through selected retail channels."
    
    It seems like we could of said we are'nt making Starions anymore so buy
    a Venturis!  Now we need to spend all this time explaining to people
    that yes you can still buy a digital PC for your kids at CompUSA it
    just won't be a Starion. 
    
    Why could'nt we put a positive spin on this like:
    
      We are'nt going to be making Starions anymore but we have a better
      solution for you. Try our commercially proven Venturis line. Available 
      at CompUSA, Circuit City, etc.
    
    
    
    Pete

Re: .13

Except that the Venturis is not a suitable "replacement" for the Starion.  It
does not come with the bundled hardware and software the Starion market
expects (and the retail stores demand).  CompUSA does not stock Venturis models
for display - sure, they'll take orders....

Now we could "do a Dell" by coming up with nice Venturis and Celebris GL
packages and sell them mail-order, but I suspect that the primary motivation
behind this is that Digital could not put the necessary resources into place
to support the home PC market.

				Steve

>> I watched and clearly heard one of the Boston TV stations report that we
>> are getting out of the PC business. Period. This was around 6:00 pm last
>> night.
    
    I agree with those who say we could have communicated this in a better
    fashion.  However, in fairness to the people who put together our press
    releases, there is no way this reporter should have drawn this
    conclusion if he had read the beyond the first sentence.
    

    	I have a model 942 on back-order with PC's Complete. Will Digital
    	fill this order now ?
    
    	Mike

On WBUR (Boston's NPR station) it was reported correctly as
"Digital getting out of the home PC market and focusing on PC's for 
bussiness" and they added "analysts expect the move to be good for 
profits".

    What I would like to know is why?     What was broke?    The delivery
    mechanism?    The order system?    No profit margin?   Retail channels?
                                                  
    Are we doomed to recreate mistakes from the past because we never
    learned the first time?   
    
    It almost sounds like the retail channels and the work that was done
    never went over...    If this is the case I fail to see why Digital
    could not do what IBM, Compaq, HP have done.   We still need retail
    channels in my opinion.    Why?     
    
    
    
    
    
    
    

    Thank God public Radio at least got it right.  That will make me feel
    more responsive when they next have a find drive.  
    
    It would appear that this is a good move for Digital, because the
    retail PC business is so cut-throat and we don't have a brand name
    recognition.  My concern is whether we even have brand name recognition
    amongst business clients. Only time will tell.
    
    Regards,  Ken Hanly       

    sigh.... we should have just said that we were retiring the Starion
    line... end of discussion...

    
    >  What was broke?
    
      This is pure speculation,  but we've all heard about the delivery
    problems with starions.  That combined with the forecasts of a drop
    in pc prices over the next year might have implied that the volume would 
    never get high enough to make it profitable. 
    
      Focusing on the higher margin PC's may be an attempt to cut the
    downside exposure to another round of price wars (which are fiercest
    in the lower end of the price bands.).
    
      Just my guess - not based on anything...

        >  What was broke?
    
    One of the internal announcements, at least, indicated that the home PC
    market accounted for less than 10 per cent of Digital's PC business. 
    It looks like we just couldn't make a dent there, and decided to
    concentrate on markets where we could do better -- and have been doing
    better all along.  Sounds like a justifiable business decision.
    
    FWIW, WBZ radio's business news segment did the announcement right this
    morning, carefully pointing out that Digital was leaving the *home* PC
    market in order to concentrate on the commercial market.
    
    If everybody got the same announcement (who knows?), and some broadcast
    it right while others got it wrong, maybe the *whole* blame for the
    confusion doesn't rest within Digital.  It sure wouldn't be the first
    time the media screwed up a report...
    
    -Mark

    CNBC got the story right on their noontime show - even had some film of
    a Digital clean room environment and some employees at work.  Further
    stated we were currently up 5/8, which (whether true or not) would lead
    some listeners to imply that it was a correct decision.
    
    RE: .18
    Here in the Syracuse, NY area we saw Digital PCs in numerous
    environments, such as Lechmere's, Sam's Clubs, and so forth.  The
    problem with the home PC marketplace is two-fold:
    
    #1 - It is driven solely by price and
    #2 - The retail stores give the PC vendors very, very little time
         to establish their presence (typically one month).
    
    If a PC vendor such as Digital cannot establish a presence in a short
    period of time, the display area and advertising space devoted to that
    vendor begins to take a backseat to others, typically Compaq,
    Packard-Bell, and the occasional IBM, at least in our neck of the
    woods.  Now stack that up against Digital's premium price, "we're
    Digital so the customer will gladly pay more" mentality, and you have a
    prescription for failure.
    
    The stores will not/cannot take the time to educate the customers as to
    why a Digital product may be better.  I have personally convinced
    customers in the past to go with a Digital PC or printer while visiting
    Lechmere's, and while it was gratifying to do so, it took a lot of my
    time.  Store personnel will take the path of least resistance and sell
    them what the customer thinks they need, which is almost always the
    cheapest product.
    
    IMHO, barring a change in Digital's approach that signaled we would be
    a low-cost provider, we made the best decision.  
    
    Chuck
                                                                           

    What does the announcement/policy change mean in terms of
    where pcs will be sold?  It says Dec will continue to sell to
    the home office/professional;  certainly many of these people
    buy from local stores, so what conclusion do we draw about the
    selling channels...
    

    Hey, now with all those "Home PC's" that we will not be able to sell,
    It looks like a good time to give all employees a new PC to do
    meaningful work. Upgrade our inhouse technology.
    
    : }
    

    It sounds like we shot ourselves in the foot again.  We would advertise
    and build up demand, but we never seemed to have enough supply to meet
    the demand.  Recall all the stories we heard about our retail outlets
    having a demo unit and nothing in stock and no idea when there would be
    more.  And wasn't the high end of the Starion line aimed at the SOHO
    market?
    
    Bob

Ummm, Ah, we were never really in the Home PC market, were we?

Now that we will have no products in retail stores, is there any point to
advertise on TV?  Not that I ever saw any of the new ones anyway...

Paul

    RE: .24  "Where will DEC PCs be sold":
    
    CNBC said they were told by Digital sources that we would more heavily
    emphasize outlets such as CompUSA, which I find puzzling.  We are
    already in the CompUSAs and others like them, and while they are
    growing their corporate/business accounts, don't they still sell
    primarily to       Consumers.
    
    Chuck

    re: announcement
    
    Just by extreme coincidence today, I was cleaning out a cabinet,
    and came across a bunch of Rainbow literature, for sale at your
    friendly local Digital Retail Store.
    
    Geoff                                                  

    we were never in the home market in Europe.I only hope that the efforts
    to boost business sales work quickly since our market position is not
    exactly rosy.In a recent survey,11 of the top 15 best selling servers/
    laptops and PCs were Compaq(sold through Ingram btw)

    Sounds like a replay of the Quantum decision: get out of the business
    before margins turn negative. Maybe a few months late, even :-)
    
    A year from now I hope we can look back and say "Good forecasting, Bob".
    Only time will tell, but right now it looks to me like a good idea.
    
    But let's make sure the right message gets out!
    
      John

  The difference is that the "Storage Device" business is pretty
  free-standing.

  The "Home PC" business is not very distinguishable from the
  "SOHO PC" business is note very distinguishable from the
  "Office PC" business. While the companies do design systems
  to target each of these segments, a competent PC can operate
  across the milleaus, and the marketing you do in one segment
  *DEFINITELY* affects how you're perceived across all the
  segments. And how you're perceived in one segment as a
  company *DEFINITELY* affects how you're perceived as a
  company across all the segments.

  Quick: Which are the Hewlett-Packard "Home" printers? Which
  are the "SOHO" printers? Which are the "Office" printers?
  Do *YOU* see H/P as one company or three?

  Meanwhile, we just bailed out *AGAIN*, after loudly trumpeting
  (well, at least "loudly" in "Digital" terms) how we were going
  to be #5 in PC share, etc. etc. etc. blah blah lah.

                                   Atlant

    The fact that there were still customers even though the delivery times
    were so long tells me that the customer perceived something of value -
    worth waiting for. Many of these may have actually been willing to pay
    an extra $100. The ones that wouldn't pay would effectively reduce the lead
    times for the ones who would. I don't think anyone here expected us to
    be a price leader (beating out nonames, PB etc) ... so maybe we could
    be the quality leader. Find the people whos cars are Lexus, Infinity,
    Cadillac, BMW, Marcedes and the like and sell them a top of the line
    PC. All the bells and whistles (fastest disks, CD,s, best speakers).
    These are the folks who will be making the decisions for corporate PC
    purchases.
    
    ---- When you have to have the best....Digital Home PC's ----
    
    Rob Wall
    
    p.s. I presume the extra 100 would help us to break at least.
    
    p.p.s. I know, break even might not sound so good, but if the business
    breaks even financially and then you add a figure for "mind share" you
    will be in the black.
    
    [OK folks, flame away!]
                              

    Sorry, I mean't to say ..
    
    the extra $100 would help us to break even at least.
    
    r
    

    I get the idea that these days "the powers that be" aren't interested
    in breaking even, or even in making a small profit.  If a market
    doesn't have the potential of at least a 10%-15% profit margin at
    the bottom line AND the potential for growth, we aren't going to do 
    it.  That's why we sold the disk business: the profit margins, even 
    when one succeeds, are just too small.
    Some companies are willing to sell products with 5% profit margins,
    or stay in markets that are declining (like character cell terminals).
    BP isn't interested in doing that.

    > Find the people whos cars are Lexus, Infinity, Cadillac, BMW,
    > Marcedes and the like and sell them a top of the line PC.
    
    Good idea, perhaps.  But they don't buy their cars at Sam's Club -- and
    probably they don't buy their business's PCs there, either.  Maybe
    Digital is in fact going after those people, and leaving behind the
    people who buy Ford Escorts and Toyota Tercels, and Packard Bells at
    Lechmere.
    
    But then again ... who knows?  <Insert {smiley|frowny} face here>
    
    -Mark

A news article I read yesterday said that analysts thought this was a good
move and hinted that Compaq may soon decide to make a similar exit.  It did
say that without "home PCs", that Digital had no hope of breaking into the
top ranks of PC makers.

					Steve

> But they don't buy their cars at Sam's Club --

I bought my car at Sam's club.  Ok, so it's not a luxery car; but minivan's are
getting pretty close on the top end to some lower end luxery prices.

I bought my PC at Sam's club too.

Oh well.

> I bought my car at Sam's club.  Ok, so it's not a luxery car; but minivan's are
> getting pretty close on the top end to some lower end luxery prices.

    I'm not knocking those who buy cars at Sam's Club.  If it's right for
    you, great.  But look again at the list of cars cited:
    
    > 		Lexus, Infinity, Cadillac, BMW, Mercedes
    
    Though the top-end minivan may seem very expensive to you and me, you
    could buy two of them for the price of a mid-pack Lexus, BMW, etc...
    We just aren't in that league.
    
> I bought my PC at Sam's club too.
    
    That illustrates my point exactly.
    
    -Mark
    
    P.S. I repeat -- I'm not putting down anyone reading this.  But you can
    bet Ross Perot and Steve Forbes and Bill Gates and Robert Palmer are
    not stocking their businesses out of the local discount club.  That's
    just reality, don't you think?

    
    We announce the fastest server (TurboLaser 350) - available March 1!
    We announce the fastest workstation (Alcor 333) - available immediately!
    We announce we are getting out of the consumer PC business.
    
    
    Wonder what people are talking about?
    
    								-mr. bill

    
    	Actually getting out of the "consumer" PC marketplace is probably
    not all that bad an idea. We are not, and never have been, a consumer
    products manufacturer.
    
    	And to highlight others, making a profit is far more important
    at Digital than avoiding a loss.
    
    	Businesswise, it was a good move.
    
    
    		the Greyhawk

    Any date
    
    For Immediate Release
    
    Digital Equipment Corporation today announced bold objectives and a
    comprehensive strategic plan to capture "X"% of small business and
    business desktops by date mumble.
    
    In a prepared statement, VP Mumble Mumble stated: "Digital's
    distribution channels are tightly focused on helping businesses
    increase productivity and profitability through the use of advanced
    computing and communication technology.  We believe that, by focusing
    our corporate resources on these channels we have the ability to solve
    the information technology challenges faced by businesses large and
    small.  
    
    By focusing on an OS growth path from desktop based Windows 95 through
    high availability computer room systems, we can literally help a firm
    grow from the basement office to the fortune 500."
    
    In additional comments, Ms. Mumble stated that this focus would be
    corporate-wide, including marketing, channel partner support, and
    product development, with the venturis line of PC's getting the greates
    share of attention for desktop and small cluster users....
    
    
    or something like that.
    
    Where did that say that the company was leaving a business, and was the
    effect the same?
    
    $0.02
    
    gc
    
    PS. 
     ***ALERT***Spell Check Procedure not invoked***ALERT***
    ****ALERT***Dictionary Procedure not invoked***ALERT*** 

    
    We are competing with someone that has been bank rolled by Intel to the
    tune of $400M, hasn't been paying his bills to Microsoft, HD suppliers,
    MB suppliers and many, many others. And in the mean time is wrapping
    several $100 bills around each box in the retail channel to stay alive. 
    
    All of this will catch up to Benny eventually but we do not have
    pockets THAT deep.
    
    Simple as that.
    
    The rest of the guys in the channel today have deep pockets and can
    endure the pain.
    
     JRogich
    

    
    Interesting to read the post-exit rationale. Seems to me that the 
    same 'leaving reasons/arguments' were known before we entered the
    retail arena.
    
    jc 
    

    I think the decision to exit the home PC market was sound. We should
    have never been ther in the first place. It is too price sensitive and we
    have neither the resources or capability to succeed. Even the current
    market leaders aren't making a lot of money, if any at all. 
    
    Someone mentioned stockouts as an indicator we were having trouble. In
    another life I was a sales rep for P&G and I remember having problems
    with certain customers who were measured on inventory(and turns). It
    was to the store managers advantage not to have too much inventory on
    hand and he certainly wasn't going to get stuck with some new product
    from a no-name vendor that didn't advertise. It's not always the
    vendor's fault on stockouts.  Of course if we did advertise and
    underestimated the demand, then no way manufacturing can adequately
    catch up. Stockouts are then our fault due to faulty forecasting.
    
    Reb

    I'm disappointed with this decision as I do not agree that it makes for
    good business.  It appears to me as very short term thinking.  I know
    we have needed this type of thinking for the turnaround and our
    survival, but at sometime you need to invest and try something new to
    grow.  And I really hate to hear that we are not capable.  I think some
    good people got together and did some good work and didn't fail in
    their quest.  But because we didn't become number 1 or 2 overnight or
    add millions of dollars to the profit line, then it's cease and desist.
    
    I wonder what RCA would say about this type of approach for it's DSS
    products, or Saturn, or many of the other startup businesses that have
    or are making a difference.  I'm reminded of Dr. Deming's first point;
    "create constancy of purpose toward improvement of product and service,
    with the aim to become competitive and to stay in business, and to
    provide jobs."  His 2nd Deadly Disease is "emphasis on short-term
    profits: short-term thinking (just the opposite from constancy of
    purpose to stay in business)..."
    
    Yes, it's easier for me to give side line opinions, when I'm not
    responsible for a total enterprise of 61K employees and $13B revenues
    of a public company, but I'd just like to see us stick with things that
    have some promise and opportunity while knowing and facing the
    challenges.  Leadership should minimize the fear to move us forward to a
    new future.

    Surprising that nobody pointed out Dell's exit from the retail
    PC market two years ago.  Since then, they've done very well
    focusing on what they do best (the "powerdweeb" mail order market,
    which Digital is not in, incidentally); ask any Dell shareholder.

    Does this mean that we can expect to see an employee purchase sale
    on Starions?
    
    And if that's true, can we hurry it up so I can buy one before Learning
    Services stops being part of Digital?
    
    tom

    - I'd buy a discounted Starion in a second to send off to college with
   my daughter (who starts this fall).


   /jon

I would not expect a sale on Starion models - current models are still
actively for sale - we just won't be introducing new models.

				Steve

RE: .44

	Benny Who?

							mike

    There are several thousand MCS field engineers who will be very happy
    not to have to brave the screaming babies and slobbering dogs in
    peoples houses fixing dead CDROM drives and deaf modems on Starions
    now.

    re: .53
    
    Yeah, they'll be happy with less work, less customers, less market
    share, less name recognition, less business, less revenue
    
    
    
    let's not get too big, it'll mean more work
    
    
    
    Whatever it takes, as long as it's not too much work!
    
    
    
    
    
    
    
    
    whoa, my sarcasm quota exceeded

    I've got to wonder if the decision isn't short-sighted and
    premature.
    
    From my experiences with Denver area retailers, the Starion line 
    is competing well against the Compaqs and the (cough) Acers on the
    shelf. Price-wise, it offered good value and was within $75-100 of 
    the competition. They were beginning to catch on. You need to be 
    'back' for more than a few weeks before people start to take you 
    seriously - especially after all the bad press of years gone by.
    
    Can DEC, er, Digital compete for the corporate desktop without 
    the mindshare gained from the low end ? 
    
    Publius

"...from the armchair exec..."

I believe a past vp of the pc business unit once said that
they had learned a lesson from previous ventures into the
pc market.  That one can not be in the business of selling
pc's if you're not in the retail market.  This was back
in '92, I think.  I also think this was a time when other
companies, such as HP, were learning that lesson as well.

I wonder, have the rules changed, or have we just conveniently
disposed of our history class.

I have a Starion and have been quite happy with it.  It's too bad.
Coupled with decent service, I thought we had a winner.

JimS.

    
    The article I read in the Worcester T&G said that Digital basically 
    got "squeezed out of the market" by other companies with higher name 
    recognition such as HP and they even mentioned ACER.  I still think 
    that a presence in the retail market helps to heighten awareness of 
    Digital as a viable vendor.  
    
     Lv 

         Having worked for digital for some 22 1/2 years now it didn't surprise
me. I've seen so many products, programs, and innovative systems put in place
over the years. Often they're discontinued when they've failed to live up to 
some unrealistic goals or metric. Or as in this case as in many others just as
it appeared it was beginning to suceed. Why do we as a corportaion continue to 
dangle the proverbial carrot in front of the masses then remove it? If we 
couldn't make it in the retail with a certain partner set why not try others? 
If we couldn't keep the channels filled for our retail partners... fix the mfg
problems... don't show the masses once again that we're just not committed 
enough to continue to see 2+ years of work through to fruition.  
                                          
          You don't run a marathon then stop 100 yds shy of the finish line 
because your time wasn't what you expected. Yet digital does this regularly
in spite of the damage it does to our perception in the marketplace.


      Bob

    
     On this note of market share, yesterday I was at a customer meeting
    with some pretty high level executives. And a VP from Digital. The
    customer was basically feeling us out again. We have made a noticable
    "mind share" change with them. However, during the meeting we naturally
    degressed to the desktop. Ouch. One customer was pretty vocal in their
    opinion that without a presence in the desktop "retail" market, no
    software, no "dummies books", no books, no computers, they were having
    a hard time understanding us as a viable contendor for their hard
    earned dollars at the "enterprise" level. This same customer trusts our
    direction for the big stuff. But without the little stuff, they cannot
    pull their customers (at the desktop) into our direction. You see, they
    know that the desktop matters, and they want us to have a presence.
    Because when thier customers see the logos on the desktop, they see
    their "enterprise". They don't understand what the paths or servers
    are, nor do they care. But they can sure say... "get" me more of these,
    and it sure is easy stringing bunches of them together and you know the
    rest of the story.....
    
     I am sorry we left the market.
    
    -Mike Z.

    You could remind your customer that we still have (and for a long while
    to come, I hope!) a very broad offering in the commercial PC space.
    
    Everything thay need to get "that Enterprise Feeling" from the Digital
    logo.
    
    r

    re -.1
    
    My point is, customers who buy at retail levels also influence the
    corporate level. That PeeCee in your home works just as well as that
    PeeCee in your office.
    
     I am sorry we left the market.
    
    -Mike Z.

     Ref: -1
    
     Maybe I'm missing something but I think all of the things (software,
    books etc.) that your customer mentioned would pertain to our pc's
    as well as anyone elses.
    
     Unless what he ment was that we should be in those businesses. Which
    in that case I don't think the other "retail" vendors have much of a
    presence if any.
    
     I don't think he has a very good argument !!
    
    	Mike

Unfortunately if you want to be in the PC business I think you 
have to be fully in or fully out. The distinction between home use PC's
and business PC's is a weak distinction (Maybe one is around $2000 and the other 
is around $3000). To be a successful PC vendor you have to offer a complete line. 
I suspect that the decision to get out of certain segments of the 
PC business will not only affect our PC sales, it will also affect our 
reputation as a system vendor. 

I remember all these campaign's with flashy slogans like "in the top 5 by 95".
In typical short term fashion we set a 3 year plan with a very sharp revenue
goal. We meet the first year, everyone gets excited and then no noise the 
second year, and we cave in on the 3rd year. This is the new DEC. If you can't
make immediate impact on the stock for the share holders (and upper management
as noticed in the recent sell off) then get out. Good strategy for short term
but questionable for long term. 

Now it's time for management to keep to it's word. That is to hold people 
responsible. The bottom line here is that our targeted competitor for the 

 -1 


I cut the paragraph short it is supposed to read:


Now it's time for management to keep to it's word. That is to hold people 
responsible. The bottom line here is that our targeted competitor for the 
last few years has been "HP" and they have again cleaned our clock.

    
    Last time I went to Circuit City out here in Ventura Calif there were
    4 Starions. Lots of visibility. 
    
    Cause you know, out here people think we make watches.
    
    And retail was changing that perception.
    
    Too bad, really too bad.
    
    
    

regarding the personal computer market.

If you chose to participate in ONLY the business market you loose a 
significant portion of the name recognition that puts the competition in 
front of you.

If you're one of our potential customers, what you and your co-workers use 
at home has a profound influence on what you want to use at your work place. 

If Digital does not have a viable presence in the home PC market, they're 
not going to be able to sell to the person controlling the purse strings in 
the business market if he/she is using an IBM, Apple, or HP personal 
computer at home.  That individual is going to tend to want to stay with 
the brand he/she and his/her co-workers feel comfortable with.


JMO

    .62 read .66 referencing .61
    
    Buyers at retail influence their corporate purse pockets. Since we
    have a lack of PC presence, and a lack of PC software, in the retail
    market, those potential buyers know nothing of our fine company when
    it comes time to build/buy/integrate corporate assets. At the very
    least we had hardware mindshare growing.
    
    -Mike Z.

This strikes me as another short-term profitability measure that is likely
to have longer term danger (another example being Alpha being focused
on higher margin, lower volume spaces, which has implications for software
availability.)

The way we wound up with huge losses and a half-sized workforce is directly
attributable to the last major mis-predict (read: momentum and lack
of change) with respect to a previously profitable market (VAX/VMS and
connected sales and service) that got ridden to (and past) the brink.

Apple is arguably in the same situation now, for example.

If there was more evidence that management was very forward-looking and
prepared to cope effectively with transitions in various areas, it might
instill more confidence.  Instead, at least on the surface, this appears
to me to be setting things up for problems later.

Basically, attempting to "skim the cream" in a market (be it high-end
focused workstations, or "office PCs") puts you in an inherently unstable
situation given:

    1) it will attract competitors

    2) normally those competitors will be leaner and meaner coming from
       the less profitable portion of the market.  (Also, markets tend
       to "grow up" over time, people that buy "low-end" today are the ones
       that buy "mid-range" tomorrow - and I'm not just talking about
       computers.)

This is why Sun and the other workstation manufacturers were able to put
a big dent in VMS during the 80s (because we tried to extract high profit
levels from VAX/VMS workstations, rendering them "less than competitive".)

To be sure, no market is static - you *must* plan for change.  Being
in a profitable area is good for being able to sustain investment
for change.  However, all to often, it looks like what happens is high
margins are used to justify overhead of various forms, rather than
being used for necessary investments to sustain competitiveness over
the long haul.  (Maybe that's why so many companies "grow old and die"...)

Note that "investment" in this context includes:

    For PCs: Name recognition/experience

    For Alpha: A large enough installed base to make ISVs consider it
    an "interesting" platform

I think there is ample evidence at the moment that both of these are
hurting...  (i.e. one way to "invest" in a number of cases is to be
in lower-end markets.  Also, frequently being in lower-end, higher-volume
markets can give you the revenue stream to cover "mis-predicts".

>The way we wound up with huge losses and a half-sized workforce is directly
>attributable to the last major mis-predict (read: momentum and lack
>of change) with respect to a previously profitable market (VAX/VMS and
>connected sales and service) that got ridden to (and past) the brink.
>
>Apple is arguably in the same situation now, for example.

    If you mean 'mispredict' in general, then I agree.

    Apple did not do a good job predicing how rapidly their
    customers would switch to their new higher power machines.
    They over-built at the low end and could not meet massive
    customer demand for the new PowerPC machines.

    But here at DEC we mis-predicted by believing we could ship
    the same old drek forever.  That is very different from
    what Apple is experiencing.
    bob

Re: .42

>         Actually getting out of the "consumer" PC marketplace is probably
>     not all that bad an idea. We are not, and never have been, a consumer
>     products manufacturer.

I wished that some one had told that to HP before they entered the
calculator/printer/PC market.  HP is a scientific instrument company
and has no right  (or experience) to enter the consumer market.

For the old timers, here, Digital at one time was the premier 
printer company ala LA120.  

Gim

    
    Why bother telling anyone we're getting out of the biz. Just
    fade away....
    
    No one heard we went into the biz in any case...
    
    Jon
    

    "premier printer company ala LA120."
    
    oh yeah, a CONSUMER product.  Other than AT&T, who consumed those
    things?
    
    Mark

Well, I had an LA36 at home at one time... (connected to my PDP-11/03 - now
THAT was a home computer!)

			Steve

I agree with some of the sentiment, but I am not sure that getting the
hell out of the home PC market is bad.

I mean, who says that we have to offer PCs at the same price points as
those companies who want to deal with families' price ranges and
support costs? So if you want a Digital PC, it'll cost you maybe a few
hundred more than a Gateway or whoever, but you get what you pay for.
Corporate customers will know that, people shopping in Sam's or
Lechmere won't. Just look at who buys Packard-Bell -- not
corporations, I think.

Look at car companies who have said "we don't offer a car that is
competitive with Cavalier." Lamborghini does very well selling what
*they* want to sell to *whom* they want to sell to, as do many others.

Above all, I just hope that we are the best at whatever tier we choose
to play. We have the ability -- now go *do* it!

Pete

	Perhaps the message should have been that "Digital will not continue 
	to support a line of PC's designed for the retail market. We will target
	our retail efforts to the high end with a selection of our commercial
	products factory configured with sound and modem options."

	[wordsmith as necessary]

	r

No, we are still in the retail market. Our line(s) are targeted at
Fortune n firms all the way to SOHO but not at the home market.

Pete

Does this mean that we will start seeing Venturis and HiNote PCs in retail
stores?  They're not there now.  CompUSA sells them, but only if you special-
order.

Having HiNotes in stores would be a tremendous advance.

				Steve

  Lamborghini is in a rather different market, don't you think?
  And they aren't faced with cut-throat competition that will
  eat them alive unless they continue to grow in market share.
  (And aren't they now bank-rolled, indeed, owned by a well-known
  US marque? In fact, they're just a sort of specialty house for
  that marque.)

  Oh, yeah, they have a wee bit of name recognition already.

                                           |
                                        \  |  /
                                         ) | (
                           Atlant       /__|__\
                                           |
                                           |
                                           |

    
    And of course this does wonders to an already mediocre
    EPP program.  Now if we want a Digital PC, we can 
    order a *very* nice Celebris.... starting at a low,
    low price of $3529.  
    
    Hello, Dell?
    

Absolutely the right decision...

Welcome to the new Digital.

-Stephen

    re .79
    >Hello, Dell?
    
    Hint: don't look for them in the retail market either; they pulled
    out two years ago due to lack of profits in the market.  Funny
    that they're on your list now that Digital got out too.

RE: .81

eh?  Maybe not "retail" (defined as retail outlets) but they are certainly
in the *home* market (mail-order).  Both Dell and Gateway 2000 (and Compaq
and IBM and Micron and ...) advertise quite heavily.  Digital is totally
absent by comparison (at least in the things I read.)

Remember that the profit margin on home PCs has been cut to
the bone. We probably won't be the only ones pulling out
and, as was already mentioned, we aren't the first either.

On the other hand, MCS handles a good deal of the DELL and
(soon) the COMPAQ support. We also provide a good bit of the
WIN95 support. liesl

    re .82
    That's right, Dell exited the retail market to concentrate on what
    they do best: (what I call) the "technodweeb mail order" market.
    Digital is deemphasizing the retail market to do what we do best:
    commercial business PCs sold thru resellers.  Digital PC's get *great*
    reviews in rags associated with our target market, namely things like
    Government Computer News, Federal Computer Week, and Computer Reseller
    News (and we occasionally get an Editor's Choice from some of the more
    mail-order-oriented rags... even tho we're not really competing in
    that market, we realize these rags are just as important).  Our boxes
    are getting consistent play in PC Week of late, often being reviewed
    when <5 vendors are reviewed, not bad considering we're more like #10
    in the total-PC's-sold food chain (this might be more related to the
    PCBU and Digital Semi ad space being bought in PC Week of late, as you
    eluded to).  Kratz

a *VERY* important fact.

Sony is getting into the PC business...something tells
me they will be home consumer oriented.  Just a hunch.

I have a PlayStation...they know what they are doing.

...expect others to follow from that space...

Does anybody else grasp the magnitude of that fact? Sony?

Have you ever seen a PlayStation game like say, Wipeout, running
at 30 frames per second will full Gourand shading on this thing
that cost $299.00 out the door?  On a TV at that resolution?
Imagine what they will do with a PC!  This could be the beginning
of convergence we are witnessing here...and I mean convergence in
the hardware sense of the word...

Besides, you-never-know, our StrongARM's could be in more homes than
Intel someday...stranger things have happened. *wink*


-Stephen

    Sony?  Betamax?  Great product, head-stuck-in-sand marketing approach.
    (Just like a company I work for - or at least it used to be.  Things
    are getting better.)
    
    I love Sony - my house is full of Sony products (including a Betamax),
    but I don't see how they can offer any significant advantage over the
    other big names in PCs.
    
    				Steve

    
    Keep in mind that the Starion was the member of Digital's
    PC family that was designated "retail".  What we've really anounced
    is the Starion line was not a glorious success, and we've backed
    away from that market.  We just can't compete at those price points.
    
    In my rounds of service calls, I've seen many offices with ONE PC
    that was a Starion.  In almost every case, any customer sites that
    had many PC's, had Venturis (and loved them, by the way).
    
    If I was going to have a home/home business compter, I would pick
    the Venturi over a Starion any day.
    
    Dennis
    

The Starion was successful, in that we could sell just about every one we
made.  Customers liked them and praised our service (which, due to common
problems with the multifunction cards and CD-ROM drives, they needed a lot).
But I'm sure we lost money on them.

Technically, there's little difference between a Starion and a Venturis,
and the Starion models gave you more hardware and more software for less
money.

The biggest blow will be to the EPP, for which Starion was the breath of life.
Now employees will tend to buy non-Digital PCs since we don't have
competitive configurations.

					Steve

    
    re: .28 Advertising on TV
    
    There is little correlation between being on TV and retail presence,
    for example - Packard Bell is not on TV and they are in most retailers.
     
    What you advertise, to whom, when changes.  Many companies that operate
    as Business to Business marketers conduct image advertising - for
    example  old standards like WAUSAU insurance - companies like Archer
    Daniel Midlands ("new use for Corn" on David Brinkley show).
    
    We feel bringing back the good DIGITAL name and making it more
    well known is a key reason to be on TV. TV can rebuild your image
    faster than slower growing alternatives like print advertising, and can
    bring forward more of the emotional versus rational interest.
    
    I expect more of our key competitors - like SUN - to be on tv soon,
    with no one getting out.  We see a consistent TV presence as critical
    to keeping the momentum for DIGITAL going, and that is planning
    approach we are taking.  
    
    Bill Troy

    
    Looks like our commercial line has some friends out there...note
    reference to "budget" systems (and don't flame me if you don't like the
    price - I don't claim to have done any comparison shopping for PCs).
    
    r
    [If any of you folks would like to buy an award winning Venturis we
    will gladly build more!...and more and more and more!]
    
From:	POLAR::KANATA::SEMRAD "DANIEL SEMRAD .. PC PRODUCT ENGINEER 621-4322  02-Feb-1996 1228"  2-FEB-1996 12:27:42.29
Subj:	FYI - Celebris GL Wins Best Performance PC in Windows magazine

EXTRACTED form PC News Brief #96N-009:                   

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Celebris GL and Venturis Slimline Take Top Ratings in WINDOWS Magazine 
Review
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

WINDOWS Magazine February issue presents top awards to two Digital desktop 
products.  Of the many systems they reviewed since November 1995, the 
magazine rates Digital's Celebris GL as best "performance system." And, no 
less outstanding, the Venturis 575 Slimline garnered best in the "budget 
desktop" category. 							    

The "WINDOWS Magazine Recommended products listing" recommends 10 systems in 
each of three categories: Performance Systems, Midrange Systems, and Budget 
Systems. Evaluated on setup, documentation, ergonomics, construction and 
serviceability, and expandability, systems were assessed from a user's point 
of view. The ratings in each category were compiled to yield an overall box 
score which you can read in the chart on page 211.

    
    Sony looses $50 or more bucks on each playstation base system they
    ship out. They try to make it up on the consumer buying more games
    later on.
    
    Home PC folks don't have a chance to get into this back end revenue
    stream. PB is wrapping $100 bills around each box at this point
    (borrowed from intel). 
    
    I agree we need brand identification, but at what cost ? 
    
    JR
    

I'd like to comment on the distinction between the "low end" PC
business and the "business PCs".  I visited one of the fastest 
growing young corporations (according to INC) in the U.S. a while
back and was surprised at their PC procurement policy.  Every
week, when they've figured out how many PCs they need they
go to a local Sam's club and pick up that many Packard Bell
PCs.  They are not necessarily married to Packard Bell, but that
was their current "low cost supplier".  I was really surprised by this
but they were treating PCs as commodities (like office supplies)
to be procurred at the absolute lowest price.

I don't know whether or not this makes sense or not, but it was
interesting to see it as a corporate policy.

Another local division of a Fortune 100 company buys no name
PCs from a local integrator.  They said there was no way they
could afford the price of a major brand.

    Is there a big difference between Intel _lending_ Packard Bell $100 for
    each box PB sell at the moment, and Intel _paying_ $50 to PB for
    displaying the Intel Inside (like they allegedly do) ?

I wouldn't be so concerned, exept our major hardware competitors
in the PC market are companies like Compaq, HP, and IBM.
They're still in the market - IBM recently moved to #2 position.

Now, who are our big competitors in the workstation market?
HP, IBM, and Sun. (with Sun recently making a bid for Apple).
The other major contenders - SiliconGraphics/MIPs, are in some trouble.

Who are our major competitors in the enterprise market?
HP, IBM (Sun?) 

I am sure there are other names in these categories.  But is Digital
more like those named above or others which I've overlooked?

In all three categories, HP and IBM are still in the retail market.
Perhaps Digital's action is the start of a trend for companies
like this.  

As time goes on, I personally speculate that the lines between retail
and business identity will become even more fine.  Brand identity
will carry throughout the entire spectrum.  There are going to be enormous
opportunities in the retail market, with the new telecomm bill being
just the beginning.  Companies using their technology in the business
market today are poised to bring this technology to the retail market
tomorrow.  I think there is a lot more awareness of new markets by big
business these days than there use to be.

I have heard that '96 will be a lean year for technology companies.  In times
like this, the major market holders do better, and the "smaller" competitors
tend to close up shop.  I hope the Venturis/Celebris continues its momentum.
We could use the boost.

As always, Fwiw. 

JimS.
p.s. This is a great topic.

      This is really too bad.  I really like my Starion.

              <<< Note 4391.92 by NQOS01::16.75.160.55::comfort >>>
                     -< Businesses look for low price too >-

>back and was surprised at their PC procurement policy.  Every
>week, when they've figured out how many PCs they need they
>go to a local Sam's club and pick up that many Packard Bell
>PCs.  They are not necessarily married to Packard Bell, but that
>was their current "low cost supplier".  I was really surprised by this
>but they were treating PCs as commodities (like office supplies)
>to be procurred at the absolute lowest price.

Digital is right to get out of the home-PC market. As for companies like 
the one you visited, our PC Utility is *perfect* for them. 

This announcement hurts us EPPers, but it's one of many smart moves this 
company is finally making...

Tom 

    
    
    or is it possible that Digital realizes that the NOT pc, utilizing 
    JAVA technology will radically change the market? They are due out
    this summer, estimated price? $500.00 US 
    
    Angela
    
     

Angela:

  It's not at all clear that the "NOT pc" technology will change
  anything. Larry Ellison's gambling big, but others have lost
  the same gamble time and time again.

  Personally, I think "timesharing redoux" is *NOT* what the
  market has been waiting for.

                                   Atlant

    
    It seems as Fujitsu-ICL has decided to leave the PC arena and
    concentrate on "Computer Systems" and Service...
    
    I'm not sure how big market share they have in elsewere but here 
    in the Nordic (due the history of SAAB Data/ERICSSON Info Sys/Nokia/ICL)
    they are not insignificant. Will this enable us to increase our market
    share?
    
    /Kjell 

    Re: .99
    
    ICL Personal Systems (former Nokia Data), which is manufacturing
    the bulk of ICL's PC's in Europe, is joining forces with their
    mother company, Fujitsu.
    
    So, they're not leaving the PC arena, but combining their forces 
    to become a 1.5+ million PC's organization world-wide.
    
    The Fujitsu/ICL Personal Systems will, if I understand things
    correctly, operate independently from the "traditional" ICL
    (which is a minicomputer/services company) and other Fujitsu
    functions. And that, as 1.5+ million PC's manufacturer will
    be a bigger problem world-wide than ICL Personal System in
    the Nordics/Europe and Fujitsu in Asia ever was!
    
    ...petri

I read an interesting article the other day about the business PC channel.

I must confess I really couldn't see a distinction between business and
home PC's. If you wish to run MS-Office does it really matter whether
it's called a home or business PC?

Apparently the distinction is an artificial one in which vendor's use a 
contract to ensure that if you sell a 'business' PC you don't sell home
PC's to the same customers. So what business users are doing is going to
the likes of CompUSA and purchasing 'home' systems and so bypassing
the business channels. Apparently some of the business channels are
getting edgy about this (I think the example quoted was MicroAge which
has been in the press a lot recently) and are pushing for this contract
to be terminated. 

In other words there'a a lot of pressure in the system to abandon
the distinction. The Home and Business markets are in the process
of fusing.

M 

    The difference is just about whether you bundle games and a joystick or
    not. Otherwise a "business" or - as is popular to say - SOHO PC (for
    Small Office Home Office) is the same as a "home" PC in practice.
    
    ...petri

    It is about "price-pointing" which is one marketing technique 
    used to perform market segmentation.
    
    The ICL "retail" computer division was almost entirely responsible for
    the whole of the ICL group losses last financial year.  You can argue
    as much as you like that there is no real difference between a home
    computer and an office desktop system, but this argument is not
    reflected in price-pointing (i.e. corporate customers are not so price
    sensitive as the retail punters paying with their own cash). The
    benchmark price-point operations in the retail PC market are mail-order 
    operators and manufacturers with global wholesale channels strategies.
    
    Unless you are a global player with *ENORMOUS* volumes and sewn up
    channels, exposure to such a fickle retail market has a dramatic effect 
    on profits where margins are wafer thin.  ICL (Fujitsu notwithstanding) 
    never was nor could be such a player.  
    
    Digital is no different in this respect.

Businesses are buying "home" PCs.  See my previous entry .92

BC

        The other distiction between a business pc and a home pc is the
        fact that a home pc is basicly a set of parts and the next one off
        the line might have different parts. ie different memory chips or
        a different hard drive. As long as it has xGB of disk and yMB of
        memory it really doesn't matter. When you purchase business
        systems especially in volume you expect consistancy within the
        order. Ie all the same memory, disk drives, scsi interfaces, etc.
        It is usually worth a bit more (not a whole lot but maybe $25-50
        per unit) to make sure that they are all consistant. 

Re: .105

Warren, that's a nice theory, but in practice our "business" PCs follow the
same model you cite for "home" PCs.

				Steve

I did read in another article that the Business PC Market is "deferring
purchases" at the moment [hence Wall Street dumping Compaq stock], on the
other hand "home" PC sales are "robust". 

I do a little work with Apple and they claim the Christmas season is definitely
their best. So why are "home" PC sales robust in March?

It makes you wonder whether there's a counting error at the moment and
that perhaps a big chunk of "home" sales are in reality "business" sales.
I suppose there's no way of counting those.

M   

Today's Boston Globe had a small news item saying that the winter "boom" in
PC sales recently ended, and sales are down dramatically all around.

				Steve

There is an (ahem) interesting article in the most recent PC Week Online
(http://www.cdnet.com/pcweek) titled "Palmer: PC business still in turnaround
mode".  Since copyright law prevents me from reproducing the article here, I
will just summarize by saying that Mr. Palmer is quoted as being "Frustrated
by tight margins in the personal computer market", that we have apparently
never made a profit from our PC business (this true?) and that the company
is "Focusing the company's guns" on "Alpha's role as a Windows NT server
platform through FX32".

-Andy

    Yesterday there was an article in the Lowell SUN (I think) which was
    either an AP or UPI feed which stated a recent Dataquest report which
    says the home PC market will be non-existant by 1998 (in the US). They sited
    rapidly declining sales and market saturation as the main causes. An
    interesting article and one which (given Dataquest's readership e.g.
    vendors) may become a self-fulfilling prophecy.
    
    Debbie
    

Stock dropped by over 12 points in 2 hours once we announced that we will
not be meeting Q3 expectations :-(

    and since analysts expectations are closely related to analysts
    briefings, should we expect senior people "taking the opportunity to
    spend more time with their families" ?

>            <<< Note 4391.110 by JUMP4::JOY "Perception is reality" >>>
>                        -< Home PC market dead by 1998? >-
> 
>     Yesterday there was an article in the Lowell SUN (I think) which was
>     either an AP or UPI feed which stated a recent Dataquest report which
>     says the home PC market will be non-existant by 1998 (in the US). They sited
>     rapidly declining sales and market saturation as the main causes. An
>     interesting article and one which (given Dataquest's readership e.g.
>     vendors) may become a self-fulfilling prophecy.

   What, are they predicting that there will be no advancements in
   processor technology, etc. after 1998??  PC's bought before 1998 will
   be becoming obsolete by 2002 or 2003.  The market of first-time
   buyers may well be shrinking but there will always be those who
   upgrade.

>     Yesterday there was an article in the Lowell SUN (I think) which was
>     either an AP or UPI feed which stated a recent Dataquest report which
>     says the home PC market will be non-existant by 1998 (in the US). They
   
   What vision!   Yeah right.

   [home] PCs are practically a requirement for educational purposes.
   It's analogous to what calculators were back in the mid 70s. I
   suppose that parents won't be buying PCs for their children's
   education 5 years from now. not!

           <<< Note 4391.113 by ZENDIA::BEERMAN "Charlie Beerman" >>>
              -< Are they also predicting a stop to development >-

>>            <<< Note 4391.110 by JUMP4::JOY "Perception is reality" >>>
>>                        -< Home PC market dead by 1998? >-
>> 
>>     Yesterday there was an article in the Lowell SUN (I think) which was
>>     either an AP or UPI feed which stated a recent Dataquest report which
>>     says the home PC market will be non-existant by 1998 (in the US). They sited
>>     rapidly declining sales and market saturation as the main causes. An
>>     interesting article and one which (given Dataquest's readership e.g.
>>     vendors) may become a self-fulfilling prophecy.
>
>   What, are they predicting that there will be no advancements in
>   processor technology, etc. after 1998??  PC's bought before 1998 will
>   be becoming obsolete by 2002 or 2003.  The market of first-time
>   buyers may well be shrinking but there will always be those who
>   upgrade.
    
    I also think tht there will always be a home pc market.  Right now, one
    of my kids is presenting an insatiable demand for compute cycles for
    playing his favorite games.  The 3d graphics in the games is pulling
    the hardware along with it.
    
    We are having a party for 8th graders this coming weekend and the kids
    are talking about bringing their PCs along so that they can network
    them using IPX/SPX to play multi-user DOOM and Duke Nukem 3D.  Guess
    I'll be a network adminstrator this weekend!
    
    Guranteed that when these kids start making their bucks, they will be
    demanding the latest greatest in technology.

    

    re: last couple
    
    I don't remember all the details on what their rationale was, but I do
    remember it saying that families in with an income in the >$60,000
    range (i.e. who can afford PCs) have pretty much already purchased
    them. No mention of upgrades, but perhaps they are in the same camp as
    Oracle and feel the $500 Internet access device will supplant the home
    PC?
    
    Debbie
    

    If you look at home pc sales, they've been steadily declining
    by a large amount each of the last two years, I believe.
    

I'd have to look at the article, but "nonexistent" is a pretty sweeping
statement.  You might as well say that all the families that want cars have
them, so the car market is nonexistent.

						Brian

    I think it has more to do with how much compute capacity is needed by
    the average home user.  The analogy with calculators is probably worth
    looking at a bit more.  Calculator technology hasn't improved that much
    in recent years.  Most folks own calculators that are more than what
    they need.  Margins on calculators are thin and it's pretty much all
    commodity as far as the home user is concerned.  I agree that the same 
    thing is probably happening with home PCs.
    
    Also, the link to games is also worth looking at.  I am fuzzy on the
    numbers, but heard a report on NPR recently that talked about the
    coming shakeout in CD-ROM vendors.  I already had heard that each year
    only about 10% of the CD-ROMs produced made any money.  Now, the
    production costs for a successful CD-ROM are on the order of $1M with
    sales sometimes only a few thousand.  Consumers no longer want to spend
    $60 and higher for a game, pushing the prices down to $40 or so.  CD-ROM 
    sales are basically flat now, with lots of companies (up to a third or so?) 
    going belly up because of skyrocketing production costs and narrowing
    margins.  Again, this is fuzzy since it's been a while since I heard the 
    article.  The article did summize that, in general, if it's not a hot 
    game, a CD-ROM doesn't have much chance in the market.
    
    Looking at how home users use PC's, I strongly suspect that it is GAMES
    that have caused home users to get more horsepower.  With games getting
    fewer and further between, the need for more speed will diminish as
    well.  
    
    Steve

I think that no one knows what things will be like *next* year,
much less several years from now. All it will take is one giant
technology breakthrough and the whole game could change. 

A bigger problem in society (rather than corporations) is the 
growing difference between those that can afford home computing
(and therefore offer their children training on computers) and 
those that won't see a computer unless the schools have them in
quantities large enough to matter. 

I remember using a slide rule in high school. The first calculator
I saw was a large clumsy desk model that could (wow!) add and subtract
and it cost over $100. Several years ago I bought a calulator for
a statistics class that had so many functions I only used half of
them in class and paid $12. liesl

    As usual, I think that the prognosticators just barely scratched the
    surface of things before making their sweeping announcements. The
    realities will be something wildly different.
    
    The "home PC" is in a bit of slump business-wise, not because of
    volume, but because of profits. The market is *not* saturated, but
    instead, the "cream" has been skimmed. As mentioned in another reply,
    the high-wage households all probably have a PC or two by now. But
    even there, the ratio of PC's to family members is less than 1:1.
    
    There are still going to be millions of PC's sold into homes in the
    forseeable future, both in new homes and as replacements/addons. But
    the price pressure is going to be immense, just like in any other
    consumer electronics business. Companies that adapt to this situation
    (as HP is doing) are going to clean up. Others (like Digital) will
    realize they can't hack it and pull out. And a few (like PB) will die
    trying because they don't have the capability to succeed, but they also
    don't have anywhere else to go.
    
    Long term, the outlook for computerization of the home, the car, and
    all other human habitations is good, and getting better. The games
    today are shaping up to be the total immersion environments of the
    future. Quicken and its brothers will evolve into personal accountants
    and financial advisers. Home healthcare managers will be a necessity as
    HMO's kill off the final vestiges of "personal touch" healthcare. No
    one can forecast all the possibilities. But some companies who have
    the talent and smarts to take advantage of the market will clean up.
    
    I just hope Digital gets its act together in time ...
    
    Geoff

IMHO, The current downward trend in PC sales is a natural, temporary, 
cyclical, business growth.  PCs are in the process of moving from the MPC-2 
generation onto the MPC-3.  There are many new technologies on the horizon 
that will be available in the Fall, in time for the Christmas season, that 
will produce a new generation of cheeper, faster, better PCs.

Already announced, but not quite available technologies include, Trition 
II, USB, SDRAM, UMA, P55C, ATX, DVD, etc.

At least for the next few years, you can look for a new PC generation every 
Christmas.


							-Paul

    re .122 - Nice Note!
    
    Could you please give a brief explanation of each of those terms
    (starting with MPC .....etc.) and how they will impact us?
    
    Thanks,
    /Chris.

    IMHO = In My Humble Opinion
    PC = Personal Computer
    MPC = Multimedia PC Specification (as defined by Microsoft); MPC-1
          said, more or less, PC with Intel i386 processor with single-
          speed (150KB/s, kilobytes per second, transfer rate) CD-ROM
    	  (Compact Disk, Read Only Memory); MPC-2 s i486 with dual-speed 
    	  (300KB/s) CD-ROM; MPC-3 is Pentium with quad-speed (900KB/s)
    	  CD-ROM; all with audio board as well
    Triton II = Intel's "next generation" PCI (Peripheral Component
                Interconnect bus) support chipset.
    USB = Universal Serial Bus, newly defined standard for connecting
          peripherals (keyboards, mice, printers, etc.)
    SDRAM = S-something Dynamic Random Access Memory
    UMA = Unified Memory Architecture, Intel specification for using
          PC main memory as video memory (instead of dedicated memory
          on-board the video card)
    P55C = upcoming next generation Pentium processor family
    ATX = Intel motherboard(?)
    DVD = Digital Video Disc(?); new specification replacing current
          CD-ROM technology (probably)
    
    ...petri

    Petri,
    
    	I should know better than challenge you, but the SDRAM......
    Is that not:
    
    	SRAM  Static Random Access Memory
    
    	DRAM  Dynamic Random Access Memory
    
    just checking......
    
    it's FRIDAY!
    
    me

>     SDRAM = S-something Dynamic Random Access Memory
	DRAM =  Dynamic Random Access Memory
	SDRAM = Synchronous DRAM, which is able to transfer sequential
		locations about 4x as fast as normal "fast page mode" DRAM,
		or about 2x as fast as EDO (extended data-out) DRAM.
	SRAM =  Static Random Access Memory -- much faster access time, but
		less dense, more power-hungry, more expensive; used for cache.
	SSRAM = Synchronous SRAM -- also faster at successive transfers

>    P55C = upcoming next generation Pentium processor family
	This processor will include MMX, Intel's MultiMedia Extension
	instruction set (but no, MMX isn't an acronym, it's a trademark,
	according to Intel).