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It has had a glittering career. But are the PC's best days now
behind it?
“ENDLESS LOVE” by Diana Ross and Lionel Richie was at the top of the
charts. Ronald Reagan was staring down the Soviet Union. And Princess
Diana, aged 20, was on her honeymoon with Prince Charles. It was August
12th, 1981—and International Business Machines of Armonk, New York,
unveiled the IBM 5150, its new entry in the nascent market for “personal
computers”.
This beige box, with a starting price of $1,565, had a mere 16 kilobytes
of memory and used audio cassettes to load and save data. (A floppy-disk
drive was optional.) IBM's press release trumpeted the screen's “green
phosphor characters for reading comfort” and “easily-understood
operation manuals” that made it “possible to begin using the computer
within hours.”
IBM's previous attempts to launch a PC had failed. But today, 25 years
on, the IBM 5150 is recognised as the ancestor of the modern PC, a
crucial step in computers' evolution from geek playthings to
indispensable tools of modern business and, for many people, private
life. Roughly one billion PCs are now in use across the world; many
office workers spend more time with their PCs than they do asleep or
with their families. But the PC's spread has been uneven: in America
there are 70 PCs for every 100 people, compared with 35 in France, 7 in
Brazil, and 3 in China.
The PC has created wealth on a massive scale. The combined stockmarket
values of PC hardware and software firms exceed half a trillion dollars.
Cheap computers have boosted the productivity of individual workers. And
hundreds of millions of people have benefited from access to
word-processing, spreadsheets, e-mail, file-sharing and cheap phone
calls—to say nothing of the riches of the web.
The PC democratised computing by making computers cheaper and more
accessible than the huge mainframes that came before. IBM's PC was less
advanced than some other machines on the market. But it was backed by
the most reputable name in computing. IBM did not release a product so
much as unleash an industry.
The secret of my success
In many ways, the PC triumphed due to the very un-IBM way in which it
was developed. When IBM's previous attempts at a PC failed to sell,
being too expensive, a “skunk works” team of engineers was convened in
Boca Raton, Florida. The team did not report through IBM's stifling
bureaucracy, but directly to the top of the company. It was given a year
to devise a low-cost machine. “The people doing that work weren't
talking about it, there weren't any business cases done, there wasn't
any annual budget review,” explains Lewis Branscomb, IBM's chief
scientist from 1972 to 1986. “IBM did a lot of radical things—and that
proved to be very successful.”
To meet its ambitious goals, the team bucked two IBM traditions. First,
instead of using only IBM parts, the team chose off-the-shelf
components. Second, rather than keep the design a secret, the team made
the specifications open, so that independent software developers could
flourish. When the PC finally launched, IBM expected to sell 250,000
units in five years. In the event, it had sold nearly 1m by 1985.
Yet the very factors that led to the PC's success inadvertently
prevented IBM from reaping all the benefits itself. The PC used a
microprocessor made by Intel and an operating system made by Microsoft
(led by a 25-year-old called Bill Gates). Neither was exclusive to IBM,
and within a year other companies had worked out how to make much
cheaper “clones” of its PC. Microsoft and Intel, not IBM, turned out to
be holding personal computing's crown jewels.
“This IBM project was a super-exciting, fun project,” Mr Gates told PC
magazine in 1982. Asked what the future would bring, Mr Gates was as
blunt as he was prescient: “Hardware, in effect, will become a lot less
interesting. The total job will be in the software.” He was right.
Today, society both benefits and suffers from the PC's flexibility and
openness. The magic of the PC is that it is a general-purpose machine to
which new functions can be added simply by installing a new piece of
software. “The PC is a very fertile device,” says Dan Bricklin, the
inventor of VisiCalc, the first spreadsheet program. But this
versatility comes at a price, since it makes the PC more complex, less
secure and less reliable than a dedicated, single-purpose device.
As a result of these shortcomings, many technologies incubated on the PC
are moving off it. Functions such as e-mail and voice-over-internet
calling that were first rendered in software, just as Mr Gates
predicted, are now mature enough to be rendered in hardware. As a
result, the PC is no longer centre of the technological universe; today
it is more likely to be just one of many devices orbiting the user. You
can now do e-mail on a BlackBerry, plug your digital camera directly
into your printer, and download music directly to your phone—all things
that used to require a PC.
At the same time, the PC is under threat as the primary platform for
which software is written, as software starts instead to be delivered
over the internet. You can call up Google or eBay on any device with a
web browser—not just a PC. People have been saying it for years, but
this could finally allow much cheaper web terminals, or “network
computers”, to displace PCs, at least in some situations.
These shifts are affecting the big firms that grew up around the PC.
Microsoft has moved into games consoles and set-top boxes, chiefly in
case these other devices emerge as challengers to the PC as “hubs” for
digital content. This week it confirmed that it will launch a digital
music-player, called Zune, in response to Apple's successful march into
non-PC markets with the iPod. As for PC-makers themselves, the falling
prices and commoditisation that have so benefited consumers have turned
them into low-margin box-shifters. IBM got out of the business in 2004,
selling its PC division to Lenovo, a Chinese firm.
This does not mean the PC is dead. PC sales, at 200m a year, are at an
all-time high. The PC's versatility means it will still be the platform
on which new technologies tend to appear first. But with the rise of a
plethora of other devices and the emergence of the web as a software
platform, the PC now faces a struggle against its own technological
offspring.
Source: www.economist.com
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Daimler's Smart car lives
up to its name |
It's 8 feet long, gets 60 mpg and is surprisingly roomy and
sufficiently nimble.
By Andrew Tilin, Business 2.0 Magazine
Titans of the auto industry seldom go out of their way to use the word
"small." They don't talk much about small cargo areas or small engines,
and particularly when it comes to these SUV-loving shores, they'd rather
not think about small cars and the small profits that go with them.
But "small" has been an unavoidable term lately at DaimlerChrysler
(Charts). In finding my way into one of the company's ingenious Smart
cars, which may or may not soon appear in a showroom near you, I
discovered exactly why.
The Smart, for those of you who haven't been to Europe in the past eight
years, is a Mercedes sub-brand of "micro-class" cars that's currently
available in virtually every Western nation except the United States.
Mercedes just announced that it's finally bringing the Smart to America
in 2008, but since that day is still a ways off, I had to hunt one down
from someone the Mercedes brass clearly considers a small-fry: Steve
Schneider, the CEO of a Santa Rosa, Calif., company called Zap.
Schneider has long believed that the U.S. market is ripe for the Smart -
believed it so strongly, in fact, that he's spent years lining up a
network of dealers and taking orders for cars not in his possession.
Since Mercedes wouldn't sell to him directly, he's been buying Smarts
from third-party brokers, modifying them to meet U.S. regulations, and
then flipping them. Still, though Schneider claims to have a backlog of
nearly 100,000 orders,
Mercedes can't seem to get past the small thing: As part of its
Smart-to-America announcement, it tabbed Roger Penske's United Auto
Group to handle its U.S. dealer network.
The test drive
But in the meantime, Schneider's doing brisk business, moving cars off
his lot as fast as he can get his hands on them. My tester, Smart's
signature two-seater, the Fortwo, was one of just a few in his
possession.
I quickly grasped why he wouldn't have it for long. Soon after driving
away, I pulled into a gas station and filled up the tank ... for only
$20. Before I could screw the gas cap back on, a guy waiting for his SUV
to gulp down its huge meal came over. He seemed intrigued, perhaps even
envious. "Is it electric?" he asked.
Again, we were at a gas station. Yet I forgave the man his confusion.
The Fortwo, nearly 4 feet shorter than a Mini Cooper, looks precisely
like the sort of vehicle into which Ed Begley Jr. would origami his
gangly frame.
Mine was a convertible, done up in a crisp silver metallic. Inside, the
car is surprisingly roomy and, true to its name, cleverly designed. The
passenger seat is set back several inches to make the driver's view more
panoramic and give the passenger a bit more legroom.
If the driver's flying solo, he can fold the passenger seat flat,
turning it into a table with a built-in cupholder. A cargo shelf in back
holds enough luggage for a business trip, and the dashboard offers
plenty of cubby space for cell phones and BlackBerrys.
Behind the dash, and wrapped all around you, is a stout
aluminum-and-steel safety cage. All in all, the Fortwo has that tightly
assembled, cocoonlike Mercedes feel.
Driving the Smart offers occasional similarities to piloting its
upmarket siblings too. My house is at the end of a winding hillside
road, and the Fortwo, with its wheels pushed far into its corners,
handled the curves with go-cart aplomb.
That said, the three-cylinder turbocharged engine, while an aluminum
miracle at only 130 pounds, certainly can't be mistaken for a Mercedes
V-8. Soon I learned to stop flooring it and let the engine and the
six-speed manu-matic transmission do their thing at a more leisurely
pace, freeing me to wave at gawking kids and roll down the window to
answer the endless string of questions.
In fact, I became a rather shameless huckster. Knowing that Mercedes
previously aborted its plans to launch the Smart in the States at the
11th hour, I decided to do my part to build some buzz for the brand's
impending arrival.
I drove right into the heart of my village on a crystalline,
farmers'-market Sunday and looked for a place to park. All the curbside
spots were taken, but that didn't deter me.
I simply found a gap between two parked cars and pulled in.
Perpendicularly. With the front wheels squared against the curb, the
Smart's little rear end didn't stick out much past the cars next to it.
Having sufficiently captured the attention of the strawberry-nibbling
crowd, I got out and started chatting them up.
That's right, I explained: 60 miles per gallon. Starts at about $12,500
in Europe. Yes, I agreed, it's about time. Whether or not the automakers
are ready to hear it, on this sunny summer day in the U.S. of A., their
customers were talking quite a lot - and the topic of conversation was,
of all things, the limitless opportunity that is small.
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