The best thing about being a pessimist is that, when your worst fears are finally realized, at least you've had the satisfaction of being right. Conversely, any good things that happen are pleasant and welcome surprises.
Overall, I'm still a bit pessimistic about the state of the PC industry -- and yet, most everyone else seems to be perky and upbeat about it nowadays.
Infocorp, a California-based market research firm that tracks the industry, projects unit sales of PCs will jump 10 percent to 20 percent for the next few years after last year's lackluster 2 percent growth. Ed Juge, a top Tandy/Radio Shack executive, glowingly projected a 30 percent sales jump this year.
Those attending the Personal Computer Forum last month that was run by industry guru Esther Dyson were likewise optimistic, projecting that 1986 will be a year to heal many of the wounds left over from 1985.
The IBMers there, who should know what's going on in the industry but often don't, forecast "positive, stable growth" for PCs.
I, too, think the industry will enjoy some growth this year -- but the wrong kind and for the wrong reasons.
The Gartner Group projects a 23 percent increase in unit sales, says analyst Seymour Merrin: The problem is that this year's industry revenue probably will be the same as last year's.
In other words, price drops will drive the PC market.
That creates the business counterpart to what I call "the Commodore syndrome." You remember Commodore. It sold millions of home computers by selling them cheap. Alas, those computers didn't create a market, they created a lot of clutter in closets. Commodore, to its financial anguish, discovered that one has to offer value as well as price.
Some context: What prompted the PC boom in the first place was the (often mistaken) belief that individuals could boost their personal productivity dramatically through a judicious blend of hardware and software. These individuals purchased on the basis of specific needs, i.e., word processing for writers, spreadsheets for financial types, etc.
Then the corporations got into the act, figuring what's good for the individual is good for the group. PCs were purchased by the truckload.
Of course, what the corporations didn't realize is that these PCs had to be hooked together and -- most importantly -- you had to train people to use the darn things. In other words, larger corporations didn't figure in the hidden costs of getting their people up to speed on the computers.
Disillusion set in. People recognized that PCs didn't necessarily generate the productivity gains that had been promised.
Now, I'm the first to admit that a $900 IBM compatible costs $500 less than the same one that sold for $1,400 -- but don't kid yourself into thinking that the price fundamentally affects personal productivity. A computer that's difficult to learn how to use remains difficult to learn how to use no matter what the price.
Just because you can buy sugar at a nickel a pound instead of 40 cents a pound doesn't mean you're going to start baking your own desserts from scratch. Dropping the price of a commodity doesn't necessarily mean that the commodity will be used in new and different ways.
What really kills me is listening to the software folks chortling about how the rise in PC sales will translate into a boom in software sales. Give me a break: Somebody who is looking for a cheapo deal on an IBM PC is then going to turn around to shell out $500 for Lotus or dBase? (Borland's discount software approach at least has the logic of appealing to the skinflints.) Get with it, folks, these people are living in a discount bargain-basement world. These are the people who call a dozen travel agents and then fly standby.
What's more, much of the industry's growth is going to come from the more sophisticated users simply upgrading from PC compatibles to AT compatibles. It's a replacement/enhancement market -- not the emergence of a new market.
Don't get me wrong: I think things like desktop publishing, telecommunications/electronic mail and computer-aided design eventually will create a new generation of PC buyer. But I don't see it yet, and neither do the computer-store owners I've spoken with.
There's a very strong psychological reason why people in the PC industry are much more upbeat today than they were just six to nine months ago: They've survived. The losers have gone away, and the companies left standing are flush with the euphoria of making it through the shakeout.
Those companies and people have earned the right to be happy about their success; they've earned the right to be upbeat. But don't you think for a moment that you're going to get better hardware or software because of it.
When the software best-seller lists finally start showing different categories of software than the spreadsheet/database/word-processing triad that has dominated for so long, then the industry will start to have genuine reasons for optimism.