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From: kurt@tc.fluke.COM (Kurt Guntheroth)
Newsgroups: comp.misc,misc.headlines,misc.jobs.misc,talk.rumors
Subject: Re: Doom and Gloom, as they say, revisited (computer market failures)
Message-ID: <2843@fluke.COM>
Date: 9 Feb 88 00:41:07 GMT
References: <1177@polyslo.UUCP>
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Organization: John Fluke Mfg. Co., Inc., Everett, WA
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Since you did not hear the counterarguments, I shall repeat them, slowly...

1.  Your argument rests on a number of unjustifiable assumptions.

    1.  The useful life of a PC is 4 years.
    2.  The total number of PCs needed is 20 million.
    3.  Each user needs at most 1 PC.
    4.  The market is limited to domestic users.
    5.  Demand for PCs is based totally on the existing uses of PCs.
    6.  Domestic manufacturers are most vulnerable to a decline in the
	market size.
    7.  Computer makers only make IBM PC compatible computers for home and
	office use.

I could write ten thousand words on each of these cases.  I will restrain
myself.  Nevertheless...

In my experience, both at work and at home, the useful life of a
computer has been less than three years.  Computers die of old age or use in
5-10 years.  They become obsolete much faster and replacing them is more
economical than expanding them.  As the basic technology improves, the rate
of o0bsolescence will stretch out, but I don't think this issue is being
addressed.

As to total numbers, I have a PC at home, and one at work.  At work, video
terminals are being replaced by workstations.  At home, my wife and I
have begun to compete for computer time.  I think demand has not levelled
off yet.  This is just my opinion, but I am not making a public prediction of
gloom and doom.  I think the claim that 20 million is the total size of the
market forever amen needs more than a back-of-the-napkin justification.

I also think that measuring the market base based solely on today's uses of 
computers is a serious mistake.  If we'd done that five years ago, would we
have gotten a market size of 20 million units?  Seems unlikely.  New
technology enables new uses.  We don't know the impact of such emerging
technologies as very high capacity disk storage, smart data cards, and parallel
processing on computer use.

The analysis seems reasonable, but only if the assumptions are correct.  I
think this is the point where you part company with everybody else.