From the January 1999 issue of Entrepreneur

The breakneck speed at which the computer industry moves makes it difficult to keep up-to-date. What's more, the expeditious rate of change may leave you wondering, "But what does it all mean to my company, anyway?"

With that in mind, here's a look ahead at some of the hottest PC trends. We let you know what's hype and what's not--and offer a few insights into how these trends may impact your business.

Plummeting Prices

Not long ago, PCs selling for less than $1,000 erupted onto the computer scene with much fanfare. A real bargain, the sub-$1,000 basic computer looks like it's here to stay.

And it may not be too long before PCs of this kind can be had for less than $500, according to Robert Enderle, PC analyst with Giga Information Group, an information technology advisory company in Santa Clara, California.

But purchasing a bargain PC means making a few compromises. To offer these bargain-priced machines, manufacturers are removing all the bells and whistles, leaving users with essentially stripped-down models. That means you're buying for the here and now--and probably won't be able to take advantage of future capabilities down the road. "[Sub-$1,000] PCs are good if you don't anticipate much change in your business," says Enderle. They may also work well as a secondary computer.

Typically, PCs with pricetags under $1,000 (excluding the monitor) come with either Intel's Pentium II or Celeron processor, or Advanced Micro Devices' K6, usually with a speed of 266 MHz. They don't boast the largest hard drives around, but they're not small either: 3GB hard drives are fairly standard. They usually come standard with 56K modems and 32-speed CD-ROM drives. Many PC vendors cut corners on components like keyboards and mice, so don't expect to get the latest and greatest features in these products.

When purchasing a bargain PC, Enderle advises buying from a company with a solid reputation. Ask other entrepreneurs whom they're buying from and why; when in doubt, stick with major brands. Leaders offering aggressively priced PCs at basic performance levels include Dell Computer, Gateway and Micron Electronics. However, most PC vendors, including Acer America, Compaq and Hewlett-Packard, also have computers in this category.

A bargain basement price shouldn't always be your number-one concern, however. "Don't get hung up on [buying PCs] for less than $1,000," Enderle advises. "You want to buy what's appropriate, and the lowest priced unit is seldom the machine that has all the features you need nor is it one that won't become obsolete.

"It's probably better for small businesses to buy in the $1,200 [range] because while you're still paying very little, you may get better value." The trick: Always try to get the best combination of price, performance and features for your money.

New Attitude

Perhaps one of the more obvious PC trends appearing these days is the new look many now sport. No longer limited to big, clunky models in boring beige tones, computers this year will increasingly become available in new designs, shapes and sizes.

One emerging characteristic: the shrinking size of business PCs. "Computers are going to get smaller in 1999," Enderle says. "People want to free up space on their desks, and extra size means extra weight, which also adds to shipping costs. So manufacturers are making smaller size boxes."

And nothing epitomizes the move toward the PC's new look and feel more than Apple Computer's daring iMac, released last year. With its translucent plastic and retro look, the iMac is the coolest-looking computer we've ever seen. Its sleek design, ergonomic mouse and aqua color has caught the attention of PC manufacturers and consumers alike--and many like what they see.

Whether more PC vendors will jump on the new design bandwagon depends on how well the iMac is received (although initial reactions have been positive). PC manufacturers will likely take a cautious wait-and-see approach early this year. But Enderle believes we'll see more creative designs from PC vendors in the coming months, particularly by the holiday shopping season.

Also adding to the PC's updated image is a move toward more ergonomic products. Consumers' continued concern over carpal tunnel syndrome and other repetitive stress injuries is spurring PC vendors to come out with ergonomic mice designed with comfortable curves, as well as keyboards created with natural typing positions in mind.

Liquid crystal display (LCD) monitors, also known as flat-panel displays, are also a major part of this growing trend. LCD monitors don't emit radiation like CRT monitors do, and their reduced power requirements are friendlier to the environment. "Look for LCD monitors to become more of a mainstream product," Enderle says. If low power consumption, high resolution rates for crisp images, and slender size are advantages in your business, consider an LCD monitor.

Their only drawback: cost. Many range from around $1,500 to $4,000, although prices are expected to decline considerably. Similarly, you'll pay extra for any added functionality, from space-saving designs to ergonomic extras, so make sure you only buy the components and goodies you really need.

Now Introducing . . .

As the computer industry matures, the definition of what exactly constitutes a PC continues to change. Hence, a host of new categories of computers will flood the market this year.

For starters, there will likely be more of a fusion between mobile and desktop machines in 1999, Enderle says. Powerful, fully loaded notebooks with large screens and keyboards, and mighty processors that are perfect for both mobile and office environments will rapidly emerge. "They'll just be very, very big laptops, but they'll perform similarly to your desktop machine," Enderle explains.

A glimpse of this new product category can be seen in notebooks like those in Dell Computer's Inspiron 7000 series. Released in mid-1998, these high-end multimedia notebook computers for personal, home office and small-business use boast 15-inch screens, digital video-disk drives, 300 MHz Pentium II processors and hard drives of up to 8GB. They're designed for business users who demand high performance and lots of memory--and they're not for the small business on a budget. The Inspiron 7000 series notebook computers start at $2,599.

In addition, watch for a new breed of notebook computer designed for portable use only. These notebooks are meant for easy transportation from home to work and back but don't incorporate the petite size and weight requirements necessary on the road. More of a suitcase-sized model, these computers will be competitively priced at $1,000 or less, offer lots of battery life, and contain basic business productivity and communications features. Expect to see them to come out near year-end, Enderle says.

The good news: The emergence of these new computer categories means more choices than ever. The bad news: It makes for more market confusion. That means now more than ever, you must evaluate your unique business requirements. Then look for the category of products on the market that meets your specific business needs and budget.

The stream of SOHO products is expected to continue flowing into computer stores this year. Nearly all the major vendors are planning to release computer software, hardware, networking products and peripherals for the small-business market. With so much variety, it doesn't make sense to settle for an almost-right solution designed for someone else's business. The best advice you'll hear all year? Shop around.

Contact Source

Giga Information Group, renderle@gigaweb.com, http://www.gigaweb.com