The State of the Desktop

The laptop computer has been gaining on traditional desktop PCs for some time. Replacing one’s desktop completely with a portable computer that has enough power to handle any common task is now a feasible option for consumers, and more are heading that direction. Laptops are siphoning off sales of desktops.

As more and more customers look to smaller computing solutions, desktops are undergoing a transition.With many models, manufacturers are turning away from big, clunky, energy-hogging boxes to smaller, thinner and more energyefficient solutions.

The desktop computer market is facing a replenishment phase. Continued purchases of desktop PCs will be primarily made by existing desktop owners who need to upgrade their hardware, though more and more frequently, those consumers will seriously consider and in fact decide to spend their money on a fully powered laptop instead, according to industry analysts.

“Customers want the best use of their dollar for the PC they buy. We’ve addressed customer pain pointswith ergonomic designs. Companies are starting to question if they need all the bells and whistles.Customers want to buy the right system and forget it for three or four years and then replace it again,”Tom Tobul, executive director of emerging products marketing at computer maker Lenovo, told TechNewsWorld.

Shrinking Stateside Market

About a decade ago, computer manufacturers had few new roads to explore, having sold PCs to nearly all of the 850 million people worldwide who wanted and could afford a machine, according to Stephen Dukker, chairman of NComputing and former CEO of Emachines. Citing a Gartner Research report, Dukker said there is a potential for 755 million new computer users who can’t afford desktops as they are priced today.

“The desktop market has not been growing until recently with the rise of developing countries,” Dukker told TechNewsWorld.

A shrinking list of PC makers is voraciously pursing these potential foreign buyers, thinning out theamount of available sales. However, some manufacturers are seeing signs of renewed interest over new desktop sales.

Learning Desktops

One of the biggest developing PC markets in the U.S. is education, according to Dukker. It represents 15 to 17 percent, based on one computer for every five students. So there are lots of new users waiting for a product they can afford to buy, he noted.

By far, however, the best hope for tapping into a steady stream of new customers for desktop computers lies in foreign markets, other PC makers assert.

“We are seeing some resurgence of desktop opportunity in the U.S. market. [Compare that to a] 38 percent market share for desktops in China,” countered Tobul. “We are also seeing very positive growth in India.”

Desktop Greenery

Desktop manufacturers are facing a double-edged sword. While the desktop market sloughs through a replenishing phase, companies are discovering that green PC initiatives — efforts to make computers that require less electricity to run — are increasing the costs.

“Green PCs use less power and give more performance,” Steve Bulling, senior product manager forprofessional desktops and displays for Gateway, told TechNewsWorld.

For instance, new technologies are reducing power specifications for desktop PCs from 95 watts to 60 watts while still maintaining performance, he explained.

Related to the green PC influences are shifting attitudes over outfitting every computer user with top-of-the-line performance. There is a growing viewpoint in corporate management circles that few workers need maximum features and power to do their jobs, Bulling said.

“Consumers are starting to want smaller form factors and are becoming receptive to energy efficiency with the ability to put the box under the desk or behind other items on the desk surface,” suggested Bulling.

Desktop Trends

There will always be users who need tall towers with maximum computing power, conceded Tobul. Still, Lenovo and other desktop manufacturers are developing new designs from the ground up, he said.

One focus is on acoustics, for example. This includes new boxes to better integrate with a worker’scubicle environment and meet new concerns over thermal and physical footprints and energy efficiency, he explained.

A growing acceptance of the Linux operating system over a forced upgrade to Windows Vista may also impacton desktop trends, Bulling predicted. First, though, IT managers have to want to change, which is nothappening yet in large numbers because many are generally content with existing applications.

“We are starting to see more use of Linux, but still a ways off. We may start to see more movement towardsLinux on the desktop with reduced hardware needs once companies have to decide about upgrading toVista, because XP support ends in a few years,” he said.

New Products

“People have to consider trade-offs. Computer makers have to make desktops more sellable for thesmall- to medium-sized business market,” Tobul said.

To that end, Lenovo is planning a major new desktop announcement regarding its ThinkCentre line in a few weeks. Tobul declined to discuss specifics other than saying the new line combines form factorsand design features totally new to the ThinkCentre line.

Consumers may expect similar desktop line adjustments from other desktop PC makers over the next year.

Courting Innovation

Perhaps one of the more radical changes in the desktop computing concept is a solution developed byNComputing. It reinvents an older concept based on the thin client model. Its goal is to reduce the costof buying multiple desktop computers.

“Emachine took the (US)$800 PC and sold it for $400. That was the last major expansion in user base. Peoplestill pay today about $700. The cost to build hasn’t changed. Only the performance has changed,” Dukkerexplained.

By comparison, today’s PCs are supercomputers with 1,000 times more power than 10 years ago, hesaid. Now PC makers have to worry about a trend for all applications going to the Web.

“Nobody can make any money selling desktops. The margin is 6 percent. There is so little money that Emachines had to sell out to a competitor in a similar fashion to Compaq being absorbed by HP,” Dukker said.

A Different Take

Dukker’s desktop solution is a new twist on the thin client concept. However, the term “thin client” is not something he likes to use to describe his desktop alternative, he said.

The product uses two components. One is software for a terminal server running six or seven Linux distros and Windows. The other is the hardware device itself, consisting of a keyboard, a mouse, a flat display screen, speakers and a connection bridge to a standard base computer.

The X Series connects through a hardware connection up to 30 feet from a shared PC. The network card cansupport up to seven users. It does not require separate virtualization software because the chip thathandles the process lives on the network card in the shared desktop PC.

It draws only 1.5 watts of power per user and can be powered from the base PC much like a USBinterface powers the USB device. It costs $11 to build, and Dukker sells the system for $70 per seat.

The L Series, which costs $35 to build and sells for $149 per seat, uses an Ethernet connection to aremote server. It can be used much like a standalone unit anywhere that has access to a wired broadbandconnection to the server. Up to 30 L series terminals can run on seven $800 desktop computers to give eachtethered user a full PC experience, Dukker said.

Cost Reduction

Power consumption for the L Series is 6 watts. Compared to the standard 200 watts that powers a desktopPC, at 8 cents per kilowatt hour, NComputing’s solution can pay for itself in 18 months, according to Dukker.

Neither model has a hard drive for program or data storage. The X Series has a USB port on the networkcard that allows the user of the thin client to connect to an external storage device via a long cable. The LSeries has a USB port at the thin client location.

In both cases the USB external device can be seen by the shared PC. The thin client can also see theinternal hard drive of the shared PC.

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