Your email address:


Powered by FeedBlitz

Or add to your news reader: Add to My Yahoo! Add to Google

Monday, March 24, 2008

Consumer PC and internet entertainment might benefit from a recession

The PC is more embedded in our lives than ever before and is as indispensable as the wired telephone once was. There's just a ton of information out there on the internet. More than that, though, once the exclusive refuge of anti-social geeks, the PC has ironically been transformed into a social tool.

The film industry was born and boomed during the Great Depression. People need escape from harsh reality. In some ways, the internet is probably our time and technology adjusted equivalent. Spending is being reigned in, people are spending more time at home, internet usage is taking consistent share from standard media like television. It follows that consumer internet experiences will continue to enjoy robust interest.

I can't say that I have evidence of this. I like Google. It makes my life easier. It parses search results better than any other engine I've discovered. I see the weak Comscore data and I wonder why. I tried to buy the stock around here but it was too scary. My belief is that they're going to wind up proving a lot more recession resistant than people think. As people are driven home by the economy, they'll spend more time at their computers.

I also think the PC is going to start to show resilience. There may be a weak quarter here or there. The supply chain is more efficient than its been in years past. We're trading at post-bubble valuations and the scenario is completely different. There wasn't a massive overbuild over the last couple of years in PCs – it was in homes. The PC market has been shifting to notebooks which have a higher average selling price which has offset the slowness in the desktop market.

In 2000, inventories were just out of control. The build was unrelenting on the way in and it took several quarters to work through the excess inventory. That's not what I see here. There's definitely some hesitance in the channel. How could there not be? They read the same papers… er, web pages… we do.

Over the next year we'll see the industry start to figure out how to push PC content onto the television in more user-friendly way than the back alleys of bittorrent. Apple is fringing on this concept but the iTunes lockout limits the utility of the Apple TV. Someone will break it open. When your PC truly becomes an on demand video device that will project all of its content onto your television, there will be a golden age of sorts where bandwidth, traditional media and internet video providers will enjoy a confluence of growth.

In the meantime, I just don't see the PC as a place to cut out expense for the average consumer. And I don't see my or anyone else's web usage going down. Sure, maybe we'll buy less crap we don't need from Amazon and eBay. Entertainment, whether it be online video, games, social networking… that's not stopping if people go out to dinner less frequently. It's only going to get stronger.

No comments:

Blog Archive