The Telegraph
Since 1st March, 1999
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Update fatigue hits PC makers

New York, Sept. 30: Todd Schreiner, a Chicago business consultant, went to his local Best Buy recently to check out hot new PCs that could replace his 3-year-old computer. He decided not to buy.

Schreiner represents an unpleasant new reality for the personal computer industry. For decades it has relied on the certainty that customers have an unquenchable desire for speedier new machines. But computers have reached a point where for the most common home purposes—web surfing, e-mail and word processing—they are already more than fast enough to suit a typical home user’s needs.

“I couldn’t conceive of a situation with my software applications today where I need a computer with a 2.4-gigahertz Pentium processor,” Schreiner said, referring to one of Intel’s fastest new chips. So he decided to make do with his 3-year-old Dell PC, with a Pentium III chip only one-fifth as fast, and instead spent his money on more memory, a new digital camera and a CD-ROM burner to store his photos.

More than any other time in its 27-year history, the personal computer industry has found itself in a quandary, having to concoct new reasons to persuade the world’s 500 million PC owners to replace their existing machines. And the problem goes beyond the computer makers themselves: no new computer generally means no new copy of Microsoft Windows sold, no upgrades to word processing or spreadsheet programs.

Computer makers and chip makers have long used advances in speed as a central point to sell new computers. To be sure, such marketing will still appeal to people who edit video or process complex photographic images, for example, or do calculations with large masses of data, or play video games on their PC. They still see big benefits when they upgrade to faster chips for their processor-intensive tasks.

But even some of them are having second thoughts. Norman H. Nie, a political scientist at Stanford who has long thought of himself as a PC power user, was the co-inventor of a widely used and computer-power-hungry software program known as the Statistical Package for the Social Sciences. For more than three decades the software has taxed computing power, first on mainframes, then minicomputers and finally PCs.

Nie has always acquired new, more powerful computers as they have become available. But he said he was stunned not long ago to discover his faster new computer did not improve the speed of his software. He predicted that for many people, the upgrade cycle may be ending.

“We’re beginning to see a time where—except for the Third World—the replacement cycle for computers looks like Detroit,” where the desire for a new car every year yielded to a slower turnover, he said.

That attitude is shown clearly in a recent national opinion survey by Odyssey Ventures, a San Francisco market research firm. Among households with PCs, the intention to buy a new computer in the next six months has fallen to just 11 per cent from 21 per cent in early 2000 and the lowest level in five years. And half of PC owners now have home computers that are at least two years old—more than at any time since 1994, when Odyssey began keeping track. The pace of upgrades is crucial because, according to Gartner Inc.’s market research, they account for 80 per cent to 85 per cent of new computer sales.

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