From the December 2000 issue of Entrepreneur

It's the holidays, the season when makers and resellers of chips and PCs have visions of sugar plums and margin-saving shopping sprees dancing in their heads. This is the quarter that makes or breaks the year for many of them-and it's almost always a good time to be shopping for a new PC, or maybe even 10 of them.

This year, your shopping trip is likely to be more satisfying than it's been in years past, thanks to several trends just now coming together. A softening U.S./world economy, especially in Europe, has hurt PC sellers' top lines, while higher energy costs and interest rates will jack up shipping and inventory financing costs, prompting PC sellers to "move iron."

The end of the year is always a time of inventory disgorgement and deep discounting on old lines to make room for new models. But this year, PC product sellers have to push both new and old equipment into markets with much softer-than-expected demand. The growth in world PC sales is flattening out, says an IDC report.

Expect to see not just better prices, but also greater manageability, which could reduce your after-sale costs, according to Gartner senior analyst Mark Margevicius. Other good news for you: A slowdown in the pace of new software releases means hardware doesn't become obsolete as quickly, he says. You might squeeze an extra few months out of your current PCs until resellers get really desperate and/or you find a deal with the right terms.

Buy only as much machine as you really need for each worker, but be aware that the growth of high-bandwidth multimedia applications for the Web will require extra processing power for those directly involved in e-commerce.


Mike Hogan, Entrepreneur's technology editor, can be reached at mikehoganentrepreneur@juno.com.

Fall Fashions

As is its habit, Intel has released a bevy of new microprocessors and related component designs this season. That, in turn, is sending large PC-makers racing to discount old systems and deliver new technology.

Computer options are dizzying, and PC World (www.pcworld.com) and PC Magazine (www.zdnet.com/pcmag) are good places to find candidates for your short list. If it's worthy of coverage, it will be dissected in both magazines-and on their respective Web sites-in different ways.

Because of Intel's market reach, most of your PC options feature "Intel Inside," although these days, Advanced Micro Devices (AMD) is giving Intel a good run for your money. Even if you don't buy an AMD-based machine, you'll still benefit from the increased price/development pressure it puts on Intel, says Roger Kay, manager of IDC's PC hardware group.

Unlike some of its chips in the past, the AMD technology of today is OK. AMD chips have no significant incompatibilities with software designed for Intel machines, says Kay, and they're used by brand names like HP, Compaq and Gateway. But Intel dominates PC hardware-not just processors, but also motherboards, chipsets and related components-and it drives most new PC technology initiatives.

At press time, PC-makers are still touching up their fall lines. But the harbingers of new hardware are the concept PCs Intel introduced at its recent developers forum. As in any other fashion show, some are a little too avant-garde for general consumption, like the Badis Badis with its movable cooling fins on top. But the features in the concept PCs below are already starting to pop up in more mainstream PCs:

Akeru: The Akeru is the highest-performance concept PC, designed for full-media e-commerce, engineering or analytical applications. Powered by the new Pentium 4 processor, it also has the latest chipset, system bus and graphics enhancements. Its tool-free/screwless chassis, not much larger than a notebook computer stood on end, offers easy access to Intel's MicroATX form factor MB with its patented pop-out components for upgrade or repair. Akeru's profile resembles the current Compaq (www.compaq.com) iPAQ and Hewlett-Packard (www.hp.com) e-Vectra lines.

Enchant: Similarly, the Enchant resembles IBM's (www.ibm.com) NetVista X40, an all-in-one PC that earned Intel's Innovative PC award. Not your yuppie brother's iMac, the sleek, black NetVista X40 merges the CPU into the frame of a flat-panel LCD display. An optional IBM MicroDrive puts 1GB of storage on a disk the size of a quarter.

ICE: The ICE is a brick-like design that emphasizes connectivity. Destined to be a network-attached desktop PC and offering instant access to the Internet, the ICE has the least technology because it takes advantage of the distributed resources of the networks to which it is attached.

The innovative case designs of some of these PCs are less noteworthy than the technology within, which makes something other than a beige box possible. With the goal of improving ease of use, Intel (and AMD, for that matter) has made the strategic decision to phase out old technologies and push harder on new ones.

For starters, you'll find many PC designs devoid of legacy PC interfaces-parallel, serial, PS/2-which are slow and just take up motherboard space, says Steve Whalley, manager of Intel's Ease of Use Initiative. Intel shrunk its new FlexATX motherboard 30 percent, in part by relying solely on the USB for mouse, keyboard, monitor and other peripheral connections.

USB is already present on 99 percent of new PCs shipped, according to Cahners In-Stat Group, and peripherals-makers are starting to catch up. In-Stat sees USB peripheral shipments increasing 141 percent this year. When an updated version of the USB specification ships next year, adds Whalley, it will have 40 times the current capacity and be able to handle dozens of connections simultaneously.

Also significant are LANs for resource sharing in small and home offices. All Intel's concept PCs have built-in Ethernet adaptors for access to resources distributed over a LAN or the Internet. This coming year, Bluetooth add-ons using USB ports will add wireless connectivity for devices within a 30-foot radius, says Whalley, followed by Bluetooth on motherboards in 2002.

Another challenge: minimizing heat and noise in a PC while downsizing its footprint and upping its processing power. Intel has improved its power management and heat dissipation techniques in its concept PCs; it started by taking the AC power supply entirely out of the PC and making it an external "brick" like those used for portables. Then it added smaller, quieter fans and, says Whalley, "moved around a lot of things to remove heat passively using the chimney effect."

Air flow is helped by replacing ISA add-in card slots with new, low-profile, plug-and-play PCI bus slots. Plug-and-play hasn't always worked as advertised, but your experience is due to improve, says Whalley, as peripheral driver writers focus on this new PCI standard.

He also predicts delivery on another unfulfilled promise-the Instant On PC. Waking up a "sleeping" PC has been enough hassle that many users just leave their PCs running all the time or shut them down completely, he says. Suspend-and-resume will work better in future PC models, says Whalley, because of greater cooperation among chipset-, BIOS- and OS-makers on the ACPI 2.0 specification. Whalley adds that vendors also have worked together to reduce those long cold-boot and shutdown times to less than 30 seconds.

Shopping Tips

The savings on a great price can be quickly lost if your vendor doesn't offer ways to reduce your after-sale maintenance costs, warns Margevicius. Gartner figures the cost of maintaining a Windows desktop at around $10,000 per year-mostly soft dollars paid in labor and lost productivity. Gartner counsels corporate clients to cut time lost to PC support by buying systems from long-standing vendors who promise component compatibility for the life of that model. Vendor software should let you inventory, troubleshoot and update software and drivers remotely over a LAN or the Internet. (The new technology initiatives help.)

Corporate purchasing managers are counseled to buy the most advanced PCs they can afford. But cash-strapped entrepreneurs can find the same innovations in low-end PCs. "The low end has a lot of computing power now," says Margevicius. "Even the cheapest PCs these days are powerful enough for 75 to 80 percent of office productivity workers."

Close-out models haven't always been a bargain, since they were soon outrun by the next generation of ever-more-demanding desktop software. But the software release cycles have slowed down, while hardware performance continues to race ahead, says Margevicius. Also, with distributed processing over LANs and the Internet taking hold, not everyone needs all their software and processing power in the PC. Reversing a trend, the useful life of today's average system is now 3½ to 4 years.

But always demand a three-year manufacturer's warranty with next-business-day on-site repair, counsels Margevicius. Longer warranties are too expensive; and, while still usable, the average PC has no resale value after 2½ years.

So what do you do when an out-of-warranty PC breaks? Fix It? No way. Says Margevicius. His painful advice: Get rid of it the cheapest way you can and buy a new one. Tough love, but with all the new models coming out, there's no better of year to do it.

The Latest And Greatest

A closer look at Intel's Pentium 4 processor

Some jobs just need all the PC you can find. That's why Intel's next-generation Pentium 4 processor was created.

The successor to Intel's 5-year-old P6 architecture, the first Pentium 4 clocks in at 1.4GHz and has plenty of power for full-motion video, audio and 3-D applications from the Internet. Here's how it gets there:

A longer pipeline inside the main engine queues up three times as many instructions as the Pentium III.

The instructions are processed in optimum order, rather than in the sequence they were received.

A separate engine processes frequently used instructions-specifically, integer-based math-twice as fast as the main processing unit.

An improved Execution Trace Cache arranges predigested instructions in the best order.

A 400MHz system bus three times faster than the Pentium III's 133MHz bus can transport 64-byte-not just 32-byte-instructions from main memory.

Graphics and sound are processed faster using 144 new multimedia instructions.