The Rise of Consumer Computing: A Threat to Personal Computers

The personal computer industry may be in for a shakeup as consumer electronics companies plan to introduce devices that outstrip the processing power of the fastest desktop computers. According to industry experts, Nintendo's $250 Project Reality video-game player will surpass the computing performance of even the most powerful personal computers, making it a potential threat to the industry. This trend is not just limited to gaming, as consumer electronics companies are developing systems that could offer a broad range of consumer applications, potentially outcompeting personal computers in the market.

Key Takeaways:

• Nintendo's $250 Project Reality video-game player will surpass the computing performance of even the most powerful personal computers, posing a threat to the industry.
• Consumer electronics companies are developing systems that will offer a broad range of consumer applications, potentially outcompeting personal computers in the market.
• The trend of consumer computing is driven by the creation of new applications, such as spreadsheets, word processing, and electronic mail, which have heightened demand in the personal computer industry.
• The home market for consumer computing is potentially much larger than the $66 billion annual market for personal computers.
• Industry experts predict that the new class of video-game machines and set-top "interactive TV" players will disrupt the computer industry to a greater degree than the auto disrupted the horse and buggy, or the calculator disrupted the slide rule.
• Personal computer executives deny that the new technology will be a threat, but the economics of the situation seem to be pulling toward the consumer market.
• The trend in chip technology is driving computing into the consumer-products realm, with the number of transistors squeezed onto a single silicon chip doubling approximately every 18 months.
• The design and software for consumer computing will be overwhelmingly American, but the manufacturing will be driven by Asian electronics giants, particularly Japanese and Korean companies.
• The software side of consumer computing is being driven by big hit titles like Sonic the Hedgehog II, which have provided the financial wherewithal for creating a new industry.

Statistics:

• Nintendo's Project Reality video-game player will surpass the computing performance of even the most powerful personal computers.
• The $250 price tag for Project Reality is a significant reduction in cost for a device with such high processing power.
• The fastest machine in the world will be able to execute a billion operations a second by the end of the 1990s.
• Intel's fastest Pentium processor can execute about 60 operations a second.
• Sonic the Hedgehog II was a $400 million software best seller, dwarfing almost all of the most popular business software titles for personal computers.
• The next 10 years in computing will be driven by automating the consumer experience, according to financial analyst Bruce Lupatkin.

Sources:

• "The New York Times"
• "Infoworld"
• "International Business Machines Corporation"
• "Nintendo of America"
• "Sega"
• "Sony"
• "Kendall Square Research"
• "Microunity, Inc."
• "Cray Research"
• "Sharp Electronics"
• "Hambrecht & Quist"