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From: jbass@polyslo.UUCP (John L Bass)
Newsgroups: comp.misc,misc.headlines,misc.jobs.misc,talk.rumors
Subject: Re: Doom and Gloom, Reply to Kurt Guntheroth
Message-ID: <1223@polyslo.UUCP>
Date: 11 Feb 88 12:29:48 GMT
References: <1177@polyslo.UUCP> <2843@fluke.COM>
Organization: Cal Poly State Univ,CSC Dept,San Luis Obispo,CA 93407
Lines: 111

>From: kurt@tc.fluke.COM (Kurt Guntheroth)
> 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.

	For the case I presented, sharp reduction in Jobs and Revenues for
production and sales of PC's in the US market, ONLY 1 and 2 were necessary
to arrive at the basic answer.

	I did not make a case for 3, but rather stated that many users
need only shared access to a PC or NO ACCESS AT ALL. This is several times more
significant than the number of users who have/need multiple PC's.

	I made no claims as to your items 4, 5, 6. and 7 ... go find your
own soap box if you wish to make an issue of these points.

> 
> 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.

	At face value I would have believed that too ... but I had to
really look at what the current state of affairs and the future brings
(atleast in the next few years).

	First, yes the Z80, 6502, and 6809 systems died a quick death.
On the other hand IBM has brought it's normal long-lived product line
strategy into the PC market place. IBM PC/XT systems and clones sold
during 1981 to 1983 are largely still in use after minor upgrades for
memory and disk space. I expect many of these system will still be running
in another 4 years. I expect the rest of the PC/MS DOS systems built
in the last 5 years will be running another 4 years too. From this
It appears the useful life of a PC in this decade is between 5 and 10 years.
Who knows what products will be like in 1995.

	The reason for this is largely simple ... most of the 8088
PC/MS DOS systems are simply low cost word processors .... typewriter
replacements. Word Perfect runs as fast as the operator can type.
Nearly all the functionality is in the software, little reason to
upgrade the hardware ... it is plenty fast enough.

	Sure some users will upgrade to a faster/bigger system to do
low end desk top publishing and graphics ... and some other happy
user will take the old machine and keep on typing ...

> 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.

	See my reply to Andrew Burt .... but in a nut shell ... sure
some of us have lots of computers .... BIG DEAL who are you tring to
impress .... the average US household doesn't need one ... most people
don't even use a typewriter .... much less need/use a computer as a typewriter.

	Nor did I say the market size of 20 million was forever ... just
my best guess of the 1988 market size. I fully expect the market size to
grow over the next 5 years to absorb the used machines from the next
replacement wave in 1990 to 1994.


> 
> 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.

	It certainly would be a mistake to measure today's market size based
on 1995 possible uses. The fact of the matter is that 5 years ago when the
market crashed ... the total market size was only a few million units ....
that is why it crashed in the face of heavy production.

	Yes new technolgy enables new uses, but it takes 3 to 5 years to
integrate that technology into society. If it isn't on the market today,
it isn't going to greatly affect the industry economy in 1988/89. So ...
in a nut shell .... yes things are going to move forward, just not as
fast as the last 5 years.

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

	So far we have only heard from a few hot heads which were to
quick to post a rebuttal -- they didn't even spend any time researching
the problem ... just gave a seat of the pants reply... one hell of a way
to make major decisions about peoples futures ...


Have Fun,
John Bass
DMS Design