Thin times for computer industry

CorrespondentMarch 18, 2009 

Coping with contraction is what most of us are trying to do as we ponder what's coming next for the economy.

The computer industry is no different, expecting a 4.5 percent drop in PC shipments worldwide this year. Industry analyst IDC doesn't see double-digit growth returning until 2011, which is why manufacturers are scrambling to figure out what they can make that people are willing to buy.

Low-cost netbooks are the obvious beneficiary in troubled times.

Just ask Apple Computer. The company plays its cards notoriously close to its vest, but rumors continue to bubble around a new product that taps the market for inexpensive hardware. Steve Jobs may have said that Apple doesn't know how to produce a $500 computer that's not a piece of junk, but my guess is that he's simply defining a price-point, somewhere around $599. After all, Apple has a history of producing devices that are both cutting-edge and more expensive than the competition.

The ergonomics are a huge factor here. Netbooks are now the growth leader in laptop computers, but those I've looked at are significantly less usable than standard notebooks because of their cramped keyboards. Companies like Asus are now bringing models with 10-inch screens to market and keyboards that are close to full-size. Does Apple want to fight it out against these Windows and Linux-based machines with a keyboard or opt for the tablet design with built-in "virtual" keyboard, a vamped up version of the iPhone's? Jobs' design savvy has me thinking the latter is the more likely solution.

Much is at stake here, and not just for Apple. Microsoft, just as aware of hardware trends as Apple, is positioning Windows 7 to run on netbooks, as it tunes the operating system for release some time next year. Microsoft suffers from user distaste for Vista,a dislike that has helped Apple sell more computers and has spawned new interest in Linux alternatives.

Meanwhile, keep your eye on the browsers we use to access the Web. All of them have to keep evolving to come to grips with the sophisticated Net-based programs that are blurring the distinction between what's on your PC and what's online.

And as we move toward programs that are increasingly interactive between computer and Net -- everything from word processors to auction management tools for eBay -- we'll have to integrate tools that allow Web programs to operate when the computer is offline.

We're still early in the game on this, but if my hunch is right, our economic woes offer the perfect opportunity for interactive Web programs to take a larger share of the market.

Operating systems like Windows 7 and Apple's forthcoming Snow Leopard will have to be tuned to work just as seamlessly with these tools.

Paul A. Gilster, the author of several books on technology, lives in Raleigh. Reach him at

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