The Rise of Consumer Computing: A Threat to Personal Computers

Strategic Insights -

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"