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PC makers return this week from the warm glow of the Consumer Electronics Show in Las Vegas to face a grim winter, kicked off by a year-to-year decline of 24 percent in PC sales during the critical month of December. Not only retail PC sales but also corporate spending plans are blowing chill winds through the halls of Compaq, Dell and others.
Corporate CIOs surveyed by Morgan Stanley Dean Witter Discover & Co. rank PCs 17th on a list of 21 buying priorities. Their companies IT budgets are going instead toward database and e-commerce software.
So, whats wrong with that? Corporate PC buyers, once enthusiastic about following the upgrade trail that climbs Mount Megahertz, have noticed that theyre vastly overinvested in processing power but sadly short of storage-management, data-mining and workflow tools.
On the home front, the only PC buyers who really want faster machines are those with ambitions as video editors and those who play demanding multimedia games. The rest of the home and home-office market would rather have a merely adequate machine for school-age-or-older family members.
The bleeding-edge gadget market has turned its focus toward the latest handheld devices, such as Compaqs iPaq H3650 (with power sufficient for a corporate desktop five years ago). Digital cameras, DVD recorders and other devices are enhancing their capabilities and improving their price and performance far more quickly than PCs.
The home PC was once a centerpiece of the family room or den. Tomorrows home IT hub is more likely to live in the furnace closet as an integrated communications and multimedia router.
And the enterprise PC? It wont disappear, but neither will it be upgraded nearly as often as in that other century. The toy store is closed.