Word: pc
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Tandy has been swept up in the personal-computer industry's most savage shake-out ever. Squeezed by falling demand on one hand and a destructive price war on the other, PC makers are realizing their worst nightmare: their once exotic, high-technology products have become little more than cheap, interchangeable commodities. Since the PCs all use basically identical hardware, consumers are no longer picky about what brand of computer they buy so long as the price is right. The result: retail prices are falling an average of 8% every three months. A fully loaded IBM PS/1 computer with...
...this year the price war has claimed as many as two dozen firms, including CompuAdd Computer, a big mail-order firm based in Austin, Texas, that filed for bankruptcy in June, and Everex Systems Inc., a PC manufacturer located in Fremont, California. It has also left many others gravely wounded. Dell Computer is expected to report losses of $68 million this week, its first quarterly deficit ever. Ironically, Dell, which built a $2 billion-a-year business by selling cheap, reliable computers by mail, is being done in by copycat mail-order firms offering bigger discounts...
...producing clones -- made the company recession-proof in the past, has been badly bruised. Apple, which surprised Wall Street a week ago by reporting a larger than expected quarterly deficit of $188.3 million, has been losing its edge to software systems like Microsoft's Windows, which endow practically any PC with easy-to-use, Mac-like features. In a desperate bid to halt defections, Apple this month cut prices on 23 models of computers as much...
...Apple's -- and the industry's -- woes are just beginning. By the time the dust settles, analysts predict that fewer than 100 of the 350 PC makers in business today will be left standing. Says Richard Shaffer, editor of the Computer Letter: "What's going to happen to the personal-computer industry in the next few years won't be a pretty sight...
...primary instigators of the price war have been new small companies that function more as assembly lines than as manufacturers. Many of these firms, ; such as Zeos, Graystar and PC Brand, don't invest in costly research or development, nor do they own expensive manufacturing plants. Instead they operate out of factories and garages. Rather than make PCs from scratch, they buy everything from circuit boards, displays and disk drives to entire computers from foreign firms that largely copy American PC designs. Says Brad Smith, vice president of PC research at Dataquest: "All you need to start a PC company...