The Rise of Consumer Electronics: A Threat to Personal Computers

The personal computer industry may be ripe for a fall as consumer electronics companies are developing systems that outstrip the processing power of the fastest desktop computers. Nintendo's planned $250 Project Reality video-game player, for instance, will surpass the computing performance of even the most powerful personal computers. This shift is fueled by the creation of new applications in the consumer electronics space, which could potentially tap into a much larger home market.

Key Takeaways:

• Consumer electronics companies are developing systems that outstrip the processing power of the fastest desktop computers, posing a threat to the personal computer industry.
• Nintendo's Project Reality video-game player, priced at $250, will surpass the computing performance of even the most powerful personal computers.
• The home market for consumer electronics is potentially much larger than the $66 billion annual market for personal computers.
• Companies like Sony and Sega are also planning to introduce consumer devices that will outperform personal computers.
• Industry experts, such as Jim Clark, former chairman of Silicon Graphics, believe that this trend represents a fundamental transformation of the computing industry.
• The trend towards smaller, cheaper, and faster devices is expected to continue, disrupting the computer industry to a greater degree than the auto industry disrupted the horse-and-buggy or the calculator disrupted the slide rule.

Statistics:

• The $66 billion annual market for personal computers is dwarfed by the potential home market for consumer electronics.
• Nintendo's Project Reality player will surpass the computing performance of even the most powerful personal computers.
• The Cray 1 supercomputer, introduced in 1976, will be outperformed by the Project Reality player.
• The top consumer electronics companies, including Nintendo, Sega, and Sony, plan to introduce systems that will outperform personal computers.

Sources:

• New York Times (no date available)