A hundred million is a lot – the return of mom and pop
Jon Peddie is one of the world’s most influential technology industry analysts. He has been involved in the computer graphics industry for over 40 years and has been an analyst for over 20.
In his first opinion piece, exclusively for HEXUS.channel, Peddie celebrates an industry milestone and identifies some very encouraging trends in the computer retail market.
Last quarter the GPU industry reached a milestone – one hundred million chips were shipped. Mind you that was the fourth quarter which is seasonally high, and we may not see that level in this first quarter that will end in a few weeks, but even if shipments do dip due to seasonality or recession fears, it will just be temporary as we continue our march for the second billion PC users.
The dynamics of price elasticity have proven themselves and now sub five hundred dollar computers are commonplace with three hundred dollar versions on the way and already sighted in some corners of the world.
Jon Peddie at a 'mom-and-pop store' in Athens, Greece
Ironically we’re also seeing larger, more impressive, powerful, expensive and heavy laptops that are media centers and game machines being offered and in great demand – so the market is healthy, diverse, robust, and as always exciting.
And with all that we have seen a simultaneous contradiction in classic economics and sales. Whereas it is to be expected that the sales channel consolidate and contract, compounded by the need for economy of scale and competition from on-line sales, we are also witnessing an expansion in smaller dealers, retailers, mom-and-pop shops, system integrators and VARs.
It seems these folks didn’t get the memo that retail is dead and has been captured by the giants like Eau Claire, BestBuy, Surcouf Daumesnil, or Softmap. So instead they opened up small shops, sometimes in their homes, and proceeded to offer products, fair prices, and most of all service with knowledge about these ever more complex and impossible to repair yourself PCs – helped in their complexity ever so much by the mysteriousness of Vista.
It seems these folks didn’t get the memo that retail is deadMostly the middle sized stores have been squeezed out, beaten on price and selection by the giant Best Buys and the like, and beaten in the specialized knowledge and prompt service of the smaller specialized shops.
And so, without anyone declaring it (till me now that is) we have evolved into an interestingly bifurcated bricks and motor situation for computer sales, overshadowed and sometimes overwhelmed by the spreading spider of on-line sales.
The on-line stores will compete on price and maybe selection, but never on delivery and certainly not on service, support, or customization.