A recent article in Business Week touched on the topic of decelerating sales in the home computer market. Not that sales are declining, mind you; they're just not accelerating with the velocity that many had predicted. One of the recurring questions raised was the value of home computers aside from their use as game machines. If you process words, then obviously a word processing package is of use to you. Perhaps you need a data management program or even a home accounting package. Beyond these uses, what can you do? Or are these uses intrinsically enough?
Our opinion is that there's a bit of a crisis of expectations involved, and perhaps an inch or two of gap between the reality of a basic system and the advertisements describing a fully configured system. It is, in fact, quite frustrating to discover that a home computer may cost you $99, but the memory expansion, disk drives, and so on to go with it– which turn it into a far more practical system—may cost you an additional $1,000. And that's before you buy that word processor or data manager software.
In most consumer market items there's far more parity of pricing, given that one rarely expects to pay more for a lens than a camera; more for a record than a player. In the home computer market, especially the low end, this pricing parity expectation is even more greatly exaggerated. There's not very much you can add to your computer that doesn't cost more than the computer did.
We suggest that this simple mismatch may have a great deal to do with perceptions of machines such as the Timex/Sinclair which has recently been falling off in sales. And these aren't sales that are necessarily being lost to other market leaders. The industry is simply not expanding at the rate many expected.
Perhaps bundling (selling a combination of home computer, peripherals, and software) will provide an answer. We'll be closely watching the success of Adam, and an expected bundled Commodore 64 package, to see what the market decides.
Random Bits: Where is Baby Blue? As all the industry speculates on the arrival of the IBM Home Computer (frequently called Peanut), other industry stocks are being buffeted by the rumors and speculation about this long-pending announcement. One important point to remember is that there are literally thousands of computers being sold each day, and the market is truly growing.
Commodore 1541 disk drives are in short supply, and a rumor exists for every possible reason. While some have suggested that a recall has quietly taken place, it appears to us that the shortage that Commodore predicted several months ago is actually upon us. This shortage has been complicated by an apparent high rate of problems with the drives, causing excessive downtime and consumer complaints.
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