Xref: utzoo comp.misc:1803 misc.headlines:2297 misc.jobs.misc:930 sci.electronics:1996 talk.rumors:1021 Path: utzoo!mnetor!uunet!lll-winken!lll-lcc!ames!pasteur!ucbvax!hplabs!well!ewhac From: ewhac@well.UUCP (Leo 'Bols Ewhac' Schwab) Newsgroups: comp.misc,misc.headlines,misc.jobs.misc,sci.electronics,talk.rumors Subject: Re: Massive computer industry failures and layoff's coming soon!!!! Message-ID: <5105@well.UUCP> Date: 30 Jan 88 07:43:22 GMT References: <1105@polyslo.UUCP> Reply-To: ewhac@well.UUCP (Leo 'Bols Ewhac' Schwab) Followup-To: comp.misc,talk.rumors Organization: Me? Organized? Get real! Lines: 183 Keywords: markets layoffs futures [ Wouldn't you like to be a line eater too? ] John L. Bass forecasts a gloomy horizon for the microcomputer industry, based on the argument that the market is saturated. The *business* market may be saturated, but I feel that there are many other markets which have yet to be addressed, and which are potentially lucrative. Also, I believe his gloomy forecasts are based on the fact that the whole economy, not just the computer industry, will start a major decline by the end of the year. In article <1105@polyslo.UUCP> jbass@polyslo.UUCP (John L Bass) writes: >To my surprise it seems that >another 1982/1983 style PC market adjustment is about to happen. I.E. the >rapid market growth can not be supported by the total market size. >I use PC to mean Personal Computers of all types -- Apple, IBM, and clones. > I think this is your basic error. PC should refer to just PC's (IBM clones, et al). Whether or not Apple has problems will be for entirely different reasons. >Why and how? The short answer is that the personal computer market will dry > up quickly, since the market place is nearly saturated. This follows > the 1986 & 1987 frenzy to replace typewriters with PC's of all types. > The frenzy was for IBM Clones. Your argument that that market is saturated may be valid, but it would be valid only for this market. > Maybe 1 in 3 (about 20 million) > actually has or needs access to a PC (on their desk or shared use). > No one "needs" a PC. God knows we just finished a bloody war over in comp.sys.amiga on whether or not anyone "needs" multitasking. People curious about computers will continue to buy the things, as well as technofreaks. > The real number is probably much smaller -- look around you for the > next week and take your own sample of how many people in the general > population have/need access to a PC for any reason. > Probably very few. So create a market for them. Lord knows American business is masterful at foisting useless stuff on us. > Apple, Atari, and the other M680X0 systems are > included as PC's. [ ... ] They shouldn't be; they're completely different animals. >What can be expected during after the market crash? Many things both good and > bad -- mostly very bad. Consider the following: > 1) The US computer retail industry will suffer significantly. A number > of shops closed before/after christmas because the volumes were slowing > with margins sharply down. This trend will continue for the next year > with perhaps as many as 75% of the current computer stores closing by > mid 1989. > Those dealing *only* in PC's will be the heaviest hit, I agree. Those with a wider perspective on life will probably survive, as well as stores that cater primarily to individuals. > 3) A significant shakeout will occur in the support markets for the > same reasons. Expect tough times in chips, drives, and printers. > It is going to be doubly hard on the Japanese, Tiwan, and Korean > economies as well ... the rapid dollar shift was only the begining. > Somehow, I get the feeling that the Japanese are going to come out of this smelling like a rose... > 4) Unlike the 1982/1983 crash, the market will not recover into a > strong growth period ... the crash will mark the end of the PC boom > years. [ ... ] I disagree. The 1982/1983 crash was largely a shakeout of the entertainment-oriented computer market. That market has now reorganized and is doing very well, thank you, and with the economic recession just around the corner, is expected to do even better. The entertainment industry has done well historically during economic downturns. Don't believe me? Go to your local video arcade. Atari is still making very good coin-ops, as is Sega, Williams, and Taito. And around here, they get a lot of play. > 5) It takes about 5 years for a new market to mature. There is no > promising computer product on the horizon to force early retirement > of the current installed base of systems. An upgrade market will > exist ... but with small volumes and margins. > Obviously you haven't looked at the Amiga :-). Desktop video is only beginning to get off the ground (we've had two years head start), and so far it looks good. Also, I don't see desktop publishing (Apple's baby) heading for a downturn. > 6) The mid range multiuser systems and workstations will be > significantly affected by the price wars in the 386 product lines. > Many of the current workstation players will go down as well with > UNIX is becoming more common on 386 desktops with high res graphics. > Maybe not on 386 machines, but I suspect UNIX will become more popular, too, given that OS/2 is largely predicted to be a complete and utter loss. However, don't count Apollo or Sun out yet; they've got lots of good ideas... > 7) As with the 1982/1983 crash I expect buyers will start buying and > paying more for products from stable companies ... it is difficult > to trust your business to a computer that will be orphaned when the > maker/retailer/VAR goes out of business. > I know of very few businesses that trusted their office automation program to the Coleco Adam :-). The only stable PC manufacturer is IBM. Compaq's only product is PClones. Once that market dries up, I think Compaq is going to have trouble. IBM always has the mainframe market to fall back on. > 8) There will be a strong service and support market for orphaned > computers and software. > Absolutely, though I don't think you'll ever be able to call PC's "orphans"; there are just too many of the blasted things. > 9) There will be a sharply lower demand for computer engineers, > computer sales and support staff. [ ... ] Dunno about sales and support, but engineering looks like a strong job market to me. There's still a hell of a lot of stuff yet to be designed out there... > 10) Without the revenues from computer product sales, little domestic > funds will be available to develop next generation technology. [ ... ] Maybe, maybe not. In the midst of the 82/83 crash, Commodore developed and brought to market the Commodore-64. It did very well. Before that, all they had were calculators and the Commodore PET, so I don't think they had much capital. > 11) It is doubtful that 1Mbit and 4Mbit memory chips will reach > expected volumes and price levels. [ ... ] Unfortunate, but probably true. I expect 1Mbit chips to fall in price a bit more, but the 4Mbitters will remain way up there until the next generation of systems comes out (along with the inefficient compilers and bloated applications that will require all that memory). > 12) The price of housing will drop sharply in Silicon Valley again. Let's hope so. Properly values down there are almost as crazy as in Marin. >Ask your management what their SHORT and LONG TERM business plan looks like. >Have they thought this far ahead? If not, better find a new LONG-TERM job >before the layoffs start. > Better start looking NOW; American business is notorious for having no concept of a long-range business plan. >So you still think that this will not happen? ... consider that the VCR market >just saturated this last fall following record volumes and is headed down >rapidly ... just as the cassette player and walkman markets did a few years >ago. > Again, this is because everyone and his mother is making VCR's, with 37 heads, octophonic sound, 2.564E+34 cable channel capability, remote control, event timers that let you schedule program recording 32 years in advance, AI commercial killers, and the newly developed S-EG-XMP-ST-XT-AT- CRC-3000000 recording process which can record 24 hours of the entire electromagnetic spectrum on one tape. There'll be a shakeout, and the market will re-organize, and things will be fine again. DISCLAIMER: I'm not an economist, just an Amiga hacker, so I probably have absolutely no idea what I'm talking about. I agree there will be a downturn in the industry, but I don't think it will be as bad as Mr. Bass suggests. I hope.... _-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_ Leo L. Schwab -- The Guy in The Cape ihnp4!ptsfa -\ \_ -_ Recumbent Bikes: dual ---> !{well,unicom}!ewhac O----^o The Only Way To Fly. hplabs / (pronounced "AE-wack") "Work FOR? I don't work FOR anybody! I'm just having fun." -- The Doctor