Tuesday, May 08, 2001

Dell cuts staff - May 7, 2001

Right now, the computer industry suffers from a lack of compelling reasons to buy a new computer. If you already have a computer, chances are that it's running your operating system and associated programs rather well, and with our economy on the slide, you're probably leaning towards paying off debts instead of throwing money at an upgrade. If you don't have a computer... how the hell are you reading this? If you don't have a computer, the only compelling reason to buy one now is the Internet, but with dot.com companies dropping like flies, and everyone scrambling to find a new business model that will financially support unique web content, the outlook seems shaky to Joe Consumer.

Caught in the middle are the computer manufacturers like Dell, who were the darlings of Wall Street a year ago, and now are struggling to keep their balance sheets above the red line. Their only choice is to cut prices, which means cutting jobs. This hurts independent computer stores, which have a hard enough time competing with the big boys, and now have to shave their margins even further just to keep up. Add in Microsoft's planned release of their next operating system, Windows XP, in October, and you've got a computer industry reeling like Buster Douglas.

I think the problem for consumers is that computer turnover happens too fast. You buy a computer, it's obsolete as you walk out the door. This is a new sensation for a lot of people. You can drive a twenty-year old car on the highway with all the new cars, if properly maintained. But bring that twenty-year old computer out of the closet, and it takes three days to tell you what today's $20 calculator can figure out in half a second. There's no sense of value with a computer; there's always something it lacks.

Well, as long as I still have broadband internet access and a computer to surf with, I'll be happy. :)


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