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The Economist: A bad business

Thanks to James
Myers
for this link.

“For the past 15 years the personal-computer industry has walked
tall. But now it is hobbling”

“Though they will sell more machines in the next few years, 1999
may prove the high-water mark for revenues in the industry’s
American heartland. As for profits, even in today’s market they are
hard to come by-witness recent losses at Compaq, the word’s biggest
PC maker.”

“For Microsoft and Intel, the two halves of the Wintel monopoly,
life also seems likely to grow harder. The $50 that Microsoft
extracts for each copy of the Windows operating system will look
increasingly egregious. With the Justice Department watching,
Microsoft will be wary of exploiting its monopoly to the full.
Commercial versions of Linux, an increasingly popular alternative
operating system, also give PC makers a stick with which to beat
Microsoft-if they feel brave. As for Intel, it must now realise
that merely accelerating its product introductions is not working.
Intel will doubtless pack a lot of its chips into new Internet
devices, so long as it prices them cheaply. But it is vital for the
Wintel pair’s margins that firms rush to buy servers runnning
Microsoft’s industrial-strength, but delayed, Windows 2000 and
Intel’s equally late 64-bit successor to the Pentium.”


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