On The Runway

Like the fashion world's avant-garde clothing, new concept PCs using Intel's latest technologies offer a sneak peak at what's to come.

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.

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This article was originally published in the December 2000 print edition of Entrepreneur with the headline: On The Runway.

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