High eXPectations

Microsoft must be feeling the pressure. The IT industry awaits tomorrow`s launch of Windows XP with the anticipation that this piece of software will revitalise PC sales and bring back some cheer into what has been an otherwise pretty dismal year.

In darkest Africa, Windows XP is not going to drive PC sales in any sizeable amount.

Jason Norwood-Young, Technology editor, ITWeb

I, for one, do not think that XP has got what it takes to fix the problems the IT industry is facing today. Sure, it`s a decent operating system. For the home user, it`ll be the first time Dad brings home a reasonable OS to meet the wife and kids (unless they have an Apple already).

Yet somehow I don`t think that the adoption rate of this fairly expensive product in an already saturated (and increasingly cash-strapped) market is going to be high enough to drive PC sales to the scale needed to bring back the good old days.

When I talk of a saturated market, I am referring to the US. The Third World`s PC market penetration still leaves something to be desired. In the States, vendors are trying desperately to convince the great unwashed that they really need two PCs at home, although I haven`t heard many convincing arguments as to why yet. Get the family PDAs and a PlayStation and keep the computer for yourself.

In darkest Africa, Windows XP is not going to drive PC sales in any sizeable amount. Computer literacy, infrastructure, and useful local services are needed long before a new OS will make the slightest difference. The Presidential IT taskforce that met in George over the weekend did more for the potential African market than Redmond will ever be able to achieve.

For all the bad press President Thabo Mbeki manages to earn himself over his head-in-the-sand attitude towards the AIDS epidemic, the formation of the taskforce proved that he deserves respect from his countrymen and the international community.

This initiative, and similar initiatives that will hopefully follow in other developing countries, could open up markets for the PC manufacturers that could dwarf the US market, at least in the size game. It won`t offer a quick fix to the PC industry, but in a couple of years it could prove to be their salvation.

Of course, a couple of things will have to change before the PC market can tackle the potential high-volume, low-cost markets of the developing nations. For one thing, PCs and their components will have to be based in a currency a little less buoyant than the US dollar. One would think that after the World Trade Centre disaster that the rand would catch up to the dollar. Instead it, and other weak currencies, has plummeted like the twin towers. PC prices will have to find a stable ground for developing nations.

The entry-level PC price will also have to drop. Somewhere between development, manufacturing, assembly, shipping, and kitting the machines out with the latest software, something has to give to get machines at a price affordable to the average Chinaman, South African, or Chilean. I think that development and software will probably be the items that need serious cost cuts.

On the development side, the pace of increasing computer speeds should be stunted. While those who pray at the Moore shrine will probably shudder in their lab coats, the fact is that the Third World could go without a doubling in speed every 18 months if it meant a cheaper machine. Without the high redundancy, fast devaluation, and the simple cost vendors have to put up with just to re-kit their fabs so frequently, I`m sure some reasonable prices could be brought to market. Server development could still be kept up as the industry will need some fast machines to sell "Learn to use PC - Chinese version" to all those potential Amazon.ch customers.

Then there`s the software. An office suite (from Microsoft) and an operating system (also from Microsoft) can cost more than the PC. Either Microsoft`s got to sort out some kind of pricing structure for the developing world, or Linux has got to solve its rocket-science complexity issues to offer a computer the world`s majority can use without a doctorate in computer science.

Windows XP is about R1 000 away from being free on the upgrade version. It`s certainly not going to be a big seller to the global masses. Perhaps Microsoft isn`t the right source to look to for more PC sales. The industry should be watching Mbeki and the New Africa Initiative, and thinking about how it can build really cheap machines with Chinese, Spanish and Zulu instruction manuals.