Thursday, October 02, 2003

Consumers Leading the Way

Last year I predicted that the consumer area of digital technology would be a growth area. My logic was that as in the early days of CD-ROMs, home users had more reason to upgrade to new technology than businesses. And for a period of time, home users had better machines with CD-ROMs than you typically found at the office.

We are going through the same process again of course. Drivers of this process are the digital camera and its unending appetite for storage, the digitization of music from the popularity of downloaded illegal music and the emergence of good legal services such as iTunes, Rhapsody and MusicMatch. But if anything, the trend is likely to speed up. My evidence for this includes:

1. Apple's repositioning of itself away from the education market towards the digital imagery and home entertainment market.

2. Sony, Gateway, Dell, and HP all emphasizing the home entertainment market. Each is trying to build on their traditional areas of strength or areas of current investment: Sony with its music and home entertainment equipment, game machines and movies, notebooks and PCs; Gateway with its retail outlets; Dell with its low cost sales channel; HP with a broad array of products and dominance in printers.

3. Microsoft's continued investment in expanding Windows usage with a home entertainment versions of Windows.

4. The explosion of digital camera usage particularly low res cameras in cell phones.

5. Continued growth in digital TV recorders such as TIVO and Replay.

6. Growth of 802.11b and g wireless networks as easy ways of linking up your home network.

In fact, as I sit here typing, my notebook is downloading and playing music off the Rhapsody network and I have hooked up my notebook to my twenty year old stereo.

So while HDTV, huge plasma screens and satellite radio are all interesting technologies, we are likely to go through another period where the consumer leads the technology way in spending.

And in terms of processing power, there are only three things driving me to replace or add additional machines.

1. Digital imagery editing and processing for video and still pictures.
2. Voice processing for dictating longer memos and articles.
3. Running so many applications on my machine that the 512 meg. limitation with my notebook may be a problem in the future.

So for the first time in my life, I am actually contemplating a traditional desktop machine in addition to my notebook for my personal use.

Alistair Davidson

No comments: