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Consumers were the big tech winners in 1999

Buyers reap the benefits of intense competition in the hardware world in 1999, although the bruising market conditions leaves many firms battered.

Some high-tech products and companies excelled in 1999, while some fared conspicuously badly.

And while the hardware world lurched in many directions, the clear winner was the consumer. Though far from a comprehensive list, here are a few of the hardware products and companies that stood out in 1999.

Product winners
The PC was probably one of the least exciting but by far one of the hottest-selling products once again. It prevailed despite calls from chief executives that it was on the outs and despite tepid retail revenues for some PC makers and resellers.

But, at the same time, the PC is being reinvented. Rebates and other deals are driving the price to new lows. Dell Computer sells its WebPC online for as little as $599 after rebate, and a Compaq consumer PC can now be had, with rebate, as cheaply as $149 at resellers including CompUSA's online arm Cozone.com. Various "free" PC deals also sprang up in 1999.

"The end of the century comes to a close with a bang, as 1999 will post the highest growth [for PCs] since the introduction of Windows 95," according to a report from International Data Corp. (IDC). "A robust global consumer market, the potent combination of the Internet and ever-cheaper PCs, and a major rebound in the Asian PC market will drive projected 1999/98 unit growth of 22.6 percent."

The PC price drops could continue to have wide-ranging effects. For instance, they could stall, for the next several years at least, the widespread acceptance of newfangled, low-cost Internet devices.

The numbers seem to bear this out. IDC said in December that personal computer shipments in the fourth quarter are expected to grow about 17 percent over 1998 and 16 percent over the third quarter of 1999.

In 2000, IDC predicts growth of 18.3 percent over 1999 "as commercial demand picks up, consumer demand stays strong and the shortages of LCD panels dissipate."

Along with that growth, Advanced Micro Devices finally established itself as a major supplier of microprocessors to almost all of the top PC makers. This comes after a string of false starts and manufacturing failures beginning with its ill-fated K5 processor back in 1996.

But now, the Sunnyvale, Calif.-based company's chips are now well ensconced in all of the leading consumer PC brands. It even pulled off what many had though was impossible: It made a chip that was faster than Intel's fastest chip.

That chip is called Athlon, and it is now used widely in performance consumer computers from Compaq, IBM, and a host of small "white box" PC suppliers.

Although AMD found success, other Intel competitors bit the dust. Both National Semiconductor and IDT sold their microprocessor divisions to Taiwan's Via to stem continuing losses. Via plans to release its first competitor to Intel's inexpensive Celeron this month.

Style surfaces
Following the introduction of the stylish and popular iMac and Sony Vaio notebook, PC makers everywhere got the message: The beige box and 6-pound laptop were both due for an overhaul.

Gateway Profile 2 Compressed desktop designs also point toward a more stylish future while a wave of mini-notebooks branded by U.S. manufacturers hit the streets. Though it isn't known yet whether particular models will sell well or not, the basic designs are on target. PCs such as Gateway's Profile 2 and Dell's high-end WebPC model take advantage of fast, low-cost chips and LCD screens, which, despite some supply constraints this year, have over time come down to affordable levels.

The advantages to skinny LCD monitors is readily apparent to any user: They weigh much less than CRT screens, take up less space and often offer brighter, crisper images. The trend toward desktop LCD monitors based on digital technology will widen the gap with traditional CRT screens. IBM has been offering a 15-inch digital LCD monitor, and SGI came out with 17-inch digital LCD monitor that won accolades just about everywhere.

See special report: PC free-for-all Even servers got smaller in 1999. More importantly, though, they became inexpensive and highly practical. The Netwinder server offered by Rebel.com, for instance, offers solid LAN and Internet features, with some models costing less than $1,000.

The Whistler Interjet II is a toaster-oven sized server from IBM targeted at small businesses looking for quick, relatively hassle-free Internet access for as many as 100 users.

For $99 a month, IBM offers it as a package called WebConnections. Big Blue says that while over half of small businesses have some access to the Internet, only 6 percent of those companies have a shared Internet connection, which means many small companies pay a per-employee fee for Web use--typically ranging upwards of $400 per month for 10 employees. IBM's solution enables businesses to connect an entire office to the Net via a single connection.

Underperforming products
Some products also stood out in 1999 as underwhelming. Microsoft and its coterie of Windows CE device manufacturers are still playing catch-up in handheld computing.

But despite ongoing efforts for the last five years, the scaled-down Windows CE has never gained much market momentum in this segment. In terms of hardware market share, Microsoft has continually lagged behind Palm, which has steadily accounted for 75 percent of the market, according to IDC. Both companies will now take the battle to smart cell phones connected to the Net.

Other under-performing categories include notebook sales and retail PCs.

When Intel delayed introduction of the Pentium III for notebooks in August, this set back new notebook shipments for many manufacturers. Though Compaq, IBM, HP and others announced Pentium III notebooks back in October, availability of 500-MHz models today is still spotty. Online resellers such as Computer Discount Warehouse and Insight show limited availability, at best, of commercial 500-MHz Pentium III notebooks from Compaq, IBM and Toshiba.

Also, due to a sudden crimp in supply of LCDs in 1999--after years of supply surpluses--PC makers have been scrambling to ensure supplies. In October, Dell Computer invested $200 million in Samsung and struck an agreement to buy LCD screens from the South Korean conglomerate worth about $8.5 billion over the next five years. That move followed an investment in Samsung by Apple Computer earlier in the year.

In the fall, Dell was taking as much as six to eight weeks to deliver notebooks with 13.3-inch and 14.1-inch screens, according to customers, longer than it takes to receive most Dell products.

Retailing also took a hit. IBM decided to scale back its retail sales to focus on direct sales, while and NEC Packard-Bell announced it was getting out of retail, a channel it helped event.