VideoAlthough it seems long ago, there was a time when companies routinely replaced their old personal computers every three years and sometimes sooner. Now, with money tight and PCs powerful enough to handle most office tasks, companies are hanging on to them for four or five years and sometimes longer. So long, in fact, that it may surprise some to learn that the worldwide market for PCs is still a growth industry. True, projections have been trimmed, but IDC, for one, expects sales this year to outpace those of 2002 by 6.3 percent (in unit volume).
While companies no doubt enjoy the fact that they are able to spend less on PCs (see CFO IT's recent survey data), Roger Kay, vice president of client computing at IDC, claims that "purchases of PCs are being delayed, but if corporate profits come back in a couple of years, many companies will return to a three-year cycle."
Some enterprises continue to purchase new machines to keep up with changing business needs. This year, for example, the Bank of Montreal invested in 20,000 new PCs as part of an effort to improve customer service. The bank plans to use the new machines to run customer relationship management software that would have taxed the older models.
Even if computing horsepower is not a factor, capital investment in a fresh fleet of PCs can be put off for only so long before issues of service life begin to mount. Some disk drives, for example, have only three-year warranties and can be expected to incur problems after five years, reports Kay. "Older systems end up costing money to maintain," he says, "and the potential of data loss or intrusion increases over time."
In the good old days, makers of PCs could count on factors other than obsolescence to move merchandise. Significant new technology—be it the graphical user interface, the finally-big-enough hard drive, or the ability to multitask—had corporate customers eager to swap out the old for the new. In the absence of significant breakthroughs, computer makers today hope to win desktop sales with older ideas that have been refined and repackaged. Is either one worth the investment?
Announced last year with as much fanfare as a slumping industry can muster, the tablet PC is a pen-based notebook that weighs about three pounds and is priced from about $1,599 to $2,699. The most popular configuration, called a "convertible," includes a keyboard, which appeals to those who aren't ready to use the pen (or stylus) as the one and only means of input, and is useful for certain data-intensive applications.
Tablets, Take Two
Tablets combine the proven portability of a notebook or laptop with the continually unproven ability of computers to deal with handwriting. During a demo with a Toshiba convertible tablet PC loaded with Microsoft's handwriting-recognition software and operating system, the machine mistakenly read the word housing as housewifing. The word was written again, this time more carefully, in a very legible (to this reporter's eye, at least) longhand. But again, when converted to Microsoft Word, it came up housewifing.
When asked about this shortcoming, Andrew Dixon, group marketing manager for Microsoft's Tablet PC team, scoffed. "Sometimes it's hard for you to recognize your own handwriting," he says. "We've done a lot of work on handwriting-recognition technology, but it's certainly not perfect." And much of the software written for tablets doesn't hinge on handwriting recognition, but simply on using the pen to point and click.
Despite some software imperfections, and the related difficulty of becoming comfortable with a pen interface whether the machine understands your writing or not, some companies are viewing the tablets exactly as the computer industry hoped they would: not as specialty devices, but as straight-on replacements for desktop PCs.
"It takes a couple of weeks to get used to using a pen instead of a mouse," says Ed Sullivan, president of IBC, a distributor of industrial supplies and bearings. Based in Hartford, IBC is beginning to swap out its old PCs for tablet PCs. "We've got six in use now and more coming. We've changed our rotation of buying new PCs every three years to buying tablet PCs, so that everyone is working toward that technology," he adds.
But Sullivan is in a decided minority. IDC reports that despite Microsoft's marketing muscle (the software giant sees tablets as fertile ground for a special version of its Windows operating system), sales of tablet machines have yet to take off. "Tablets got a lot of support out of Microsoft's backing," says IDC's Kay. "Some enterprises are evaluating them, but there's not much pull for these machines." He figures that tablet PC shipments have been "in the tens of thousands" since their announcement last fall.
That means that growth may depend in part on tablets offering more than just portability. Howard Kamerer, president and COO of Bothell, Washington-based network-equipment maker Allied Telesyn Inc., says that while "the tablet PCs give you the best of both worlds"—that is, the portability and computing power of a notebook plus the convenience of a pen-based system—what matters most are the specific software applications that take full advantage of those capabilities.
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