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No more bells and whistles?

CNET's Larry Dignan asks whether the tech sector doesn't follow the same patterns as any other maturing industry. So how about those aluminum producers?

When asked his opinion about the conventional wisdom that tech mergers don't work, Compaq Computer CEO Michael Capellas had a succinct answer.

He said the tech sector isn't any different from any other industry, meaning big mergers like the proposed marriage of Hewlett-Packard and Compaq can work.

"It is the maturation of the tech sector," Capellas said. "I don't think we are so different anymore, although some people may not want to admit it."

Admit it? If you buy into Capellas' logic, the whole tech sector has to come clean on a lot of things. It will have to admit that technology may not change the world. The New Economy may just be the economy. The key to happiness may not be in the latest PDA. Maybe even Larry Ellison and Scott McNealy will become less entertaining.

In other words, maybe the tech sector is the same as any other industry. Widgets anyone? How about those aluminum producers?

Technology has followed the same pattern forever--big splash, commoditization and price pressure followed by the big fizzle. Putting tech in the same club as Alcoa may not be as far-fetched as you might think. When it comes down to it, technology has followed the same pattern forever--big splash, commoditization and price pressure followed by the big fizzle. You can make subtle distinctions. CRM (customer relationship management) software is obviously hotter than telecommunications equipment right now--but in the end, we're still pushing a bunch of boxes around.

Storage, routers and applications servers will all eventually head to the same area--commodityville. That's why it's almost laughable to hear critics of the HP-Compaq deal argue that Compaq will screw up HP's printing business. This just in: Printers are already on their way to being commodities--even those fancy ink cartridges too.

That type of realization, which incidentally, may actually sway folks in favor of the HP-Compaq deal, leads companies to focus on scale and growth that may not be all that impressive. Contrast IBM's single-digit, boring growth rate with Transmeta's empty, brash talk from a few years ago.

It's tech, and it's respectable. But it's not exactly Netscape trying to upset Microsoft.

The reality that the tech sector may not be so hot has definitely hit Wall Street--the folks that love to invest in the next big thing. In an update to shareholders, mutual fund company T. Rowe Price told shareholders to drop the fascination with technology and realize that it's the same as any other sector.

Salomon Smith Barney is apparently on the same page. "One must be careful in assessing the impact of technology and how quickly it can become commodity-like," said Tobias Levkovich, a market strategist. "One must also realize the next cyclical upturn most likely will not look anything like the prior glory days."

Fortunately, the pessimism about the tech sector is also cyclical. According to Levkovich, the economy may rebound nicely, but it doesn't mean tech will follow. Nevertheless, tech "still dominates many investors' portfolios and imaginations."

"Fundamental reality and market perception about technology still seem to be out of sync," he said, adding that tech accounts for less than 5 percent of U.S. gross domestic product.

Depressing huh?

Fortunately, the pessimism about the tech sector is also cyclical. A portion of the sector in upheaval leads to big losses, if not outright extinction, but eventually there's a killer app to save the day, a start-up that captures the imagination, something that gets folks excited again.

And then folks get a little too optimistic, and analysts start cheering for companies that are little more than fluff.

In tech, it's all about the extremes.

There isn't a crystal ball to figure out what will pick technology off the mat, but rest assured there'll be something. No one saw Microsoft coming. No one predicted the Internet would change everything. In the 1970s, Xerox invented most of the tech items we use today and had no idea what it had.

Who knows what will be. You just have to believe.