JTRex

2009: A transcendent year for the PC industry? February 11, 2009

Yes, he’s already contended with his first “screw up,” but I’m compelled to reflect on something that has stayed with me since President Obama’s Inauguration Day. After listening to pre-Inauguration on NPR while commuting, watching the oath-taking in a colleague’s cube, and tuning in again on the drive home, I wanted more that night. So I watched the Frontline special “Dreams of Obama.”

The meaningful moment for me came in the story of how Obama dealt with the Rev. Jeremiah Wright issue at its height. It is both the descriptions of what made this a pivotal moment, and how Obama responded, that lingered with me:

·         “His hand is forced” to deal with the Rev. Wright issue.

·         It is a moment of “maximum peril” for his campaign.

·         Jeremiah Wright allows Obama to “confront this issue sooner rather than later.”

Obama chooses rather than continuing to tactically deal with Rev. Wright’s sermons, to transcend the debate. He decides to write a very personal speech to address race in a much broader and more meaningful context. In delivering the speech on a Monday morning in Philadelphia, Obama regains control of his campaign’s narrative.

The personal computing industry — faced with global economy-driven reductions in demand, 20 million cheap-n-crappy netbooks sold in 2008 (and expected to quadruple by 2013?), dysfunctional and unfair competition, cloud computing/storage and more — perhaps faces just such a moment.

·         OEMs and chipmakers alike may “have their hand forced” to try new things and rise above classic PC industry tactics.

·         It feels like a “moment of peril” for dinosaurs like the “Intel Inside” iron fist that grips the industry. The prospect of 100+ million netbooks selling in a few years could unhinge Intel’s ability to keep the global PC industry under its thumb. If consumers by the tens of millions will buy an Atom-powered netbook with all its limitations – because they just want to surf, e-mail, Twitter and use cloud computing on a very portable device — what will that do to errode the potential returns on bringing arguably overwrought and reportedly underselling processors like Core i7 to a declining desktop tower PC market?

·         And with economic forecasts showing no immediate relief for the PC industry, perhaps the OEMs and chipmakers that “confront the issue sooner rather than later” will emerge as the new leaders.

2009 presents clear and immediate opportunity to transcend traditional PC industry dynamics and, hopefully, mature to a logical and healthier state sooner.

Transcendent Opportunities

• Stickers be gone: My three-year-old likes stickers and sometimes puts them places where they don’t belong. But I don’t know anyone who thinks they belong on a $1,000 consumer electronics device, especially one made by OEMs hungry to match Apple’s mastery of the aesthetic. When I bought my wife a new notebook about 6 months ago, my little boy saw all the stickers on the wristpad (yes, these included an AMD logo), and logically concluded “This is a place to put stickers.” The next time my wife opened her notebook, Jabba the Hut was looking back at her.

Should one of these ship with every PC sold?

• Netbooks that have it all (or most of it): AMD Yukon ultrathin platform is coming soon with the HP dv2 that plays 1080P video. The Nvidia Ion chipset is coming this summer, which reportedly brings 1080P video to Intel Atom-based netbooks. Faced with an HD chasm forming between AMD and Nvidia ultraportable PC capabilities and its own, Intel last week said it will pair a 720P-capabale Integrated Graphics Processor with its new Atom N280 processor some time this year. Two points on this: 1. The dark days of frustrating netbook experiences can come to an end and consumers will get the affordable, ultraportable experience they deserve. 2. What does this do to Centrino, which had an I-can’t-do-HD identity crisis of its own even at high-end mainstream notebook prices? (Note: go to 1:00 on the video.)

• Product tags that tell you something about the experience: Best Buy is a clear leader, but when I bought my wife that notebook there recently, this is what Best Buy considered the key information to put on the product tag as the consumer agonizes over a $700 to $1,700 PC purchase:
  • 3GB or 4GB of RAM
  • 250 GB or 320 GB hard drive
  • Windows Vista 32-bit or Windows Vista 64-bit
  • The price

None of which tells you a damned thing about the experience or design point of the product. Let’s tell the consumer something useful, like usage scenario categories: Good at HD video. Good at mainstream games. Good at high-end games. Good at video transcoding. Good at not using electricity or long battery life. All you need for a basic Web/cloud experience.

• Hot-Swap Desktop PCs: Another seemingly simple one, but one that actually requires innovation and R&D. One of the best and cheapest ways consumers can give PCs a makeover is to upgrade to discrete graphics. But they shouldn’t have to get all McGiever to do it. I LOVE building PCs, but I know I am in the EXTREME minority. Make plugging in a graphics card, or new memory, as easy as plugging an SD memory card into the reader on the side of your notebook. We do some of this with hot-swap server storage arrays. Let’s sprinkle a little of that on the consumer desktop market. Rahul Sood at HP with his BlackBird Hard Drives and the AMD GPG division with its Graphics Boosters are pointing the way for others to build on.

• Far more attention paid to the PC aesthetic with affordability: About 3 weeks before the initial iPhone launch, I was in Washington D.C. with Patrick Moorhead on a press tour. We met with an editor who had his iPhone review unit on him. He showed it to us without ever letting it leave his hands (don’t worry Apple, no protocol was breached). That Friday night, I remember having a fire going in the backyard with my boys, and thinking “Everything is about to change in the phone market. When the iPhone comes out, it will instantly make every other phone and smartphone seem sadly dated.” Where is THAT brand of UI and style innovation in the PC market? Apple itself took a big swing with the Mac Book Air, but perhaps overpriced. Dell? HP? Acer? Toshiba? Watcha’ got that we’ll love AND we can afford? Is the HP dv2 just such a step?

• Make it brain dead simple for PC salespeople: All this taken into consideration, you can see that much is left in the hands of the salesperson. It shouldn’t be. If $170 pocket cams can create HD video, $399 netbooks should be able to play it back. If $199 Xbox 360s play gorgeous games in HD, so should $1,000 notebooks. But today, most of them don’t. AMD introduced the 1^stmainstream HD notebook platform in 2008, and this year we’ll introduce the first affordable HD ultrathin notebook platform. Take away all the incompatibilities, up the bar on the graphics processing of everything the consumer buys, and salespeople stand to see far fewer of their customers come back only to stand in the “returns” line.

True story. My parents, both in their 70s but spry PC-users, needed a new notebook a couple months ago. They wanted AMD, being loving, supporting parents and all. First stop was a big box store. Actual conversation:

Mom: “Can we see your notebooks with AMD processors?”

Salesperson: “We have them, but I don’t recommend AMD. They are two years behind Intel in technology.”

Mom: “How so?”

Salesperson: “It’s how Intel makes their chips smaller and some materials they use.”

Mom: “Can you show me how that affects the way the notebook works?”

Salesperson: “Uhhhh…”   It’s not an easy question to answer with a straight face, especially to someone buying an $800 notebook. (Intel is fond of saying “We’re years ahead of the competition” based on the date it begins a transistor process node transition. Now, without using bar charts or saying the words “Hi-k” and “Hafnium,” Intel, please show us what 2 years into the future looks like with your products on the shelves at the big box store today. Something we can actually see and experience. In this new era of HD video and highly popular mainstream gaming, in fact Intel’s shortcomings in graphics are the easiest difference for the PC buyer to see for themselves.)

Next stop, Best Buy. Actual conversation:

Mom: “Can we see your notebooks with AMD processors?”

Salesman: “Sure! I love AMD. It’s all I use – best value by far.”

 As happy as I am that Best Buy set my folks up with a new HP notebook based on the AMD “Puma” platform, this should not have been their experience. Diametrically opposed opinions at their first two stops, with the AMD naysayer offering hype over sensibility.

And therein lies the opportunity for transcendence, but there will be winners and losers. It can’t be both ways. The big box store can’t go on selling increasing numbers of netbooks on an endcap, powered by processors that Intel says equate to 6-year old PCs, while upselling mainstream notebooks 10 feet away based on the materials used in the semiconductor manufacturing process. But that’s the paradox we saw for the first time during the 2008 holiday season.

Big changes are in store before the 2009 holiday season. Something’s got to give, consumers will benefit, and the PC industry will hopefully progress out of suspended adolescence as a result.