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Beware the perils of the gadget market

Tags:
Gadget,
Dell,
IPods

Michael Kanelllos CNET News

Published: 06 Nov 2003 17:20 GMT

Second phase is status. Eight or nine years ago, only a small segment of the population owned mobile phones, and those who did would place them on tables or bar counters when in public, just in case the premier of France called and it had to be grabbed on the first ring. This custom faded out within a few years.

The third phase is habit. A product's popularity draws a plethora of manufacturers to the market. Confused, consumers gravitate toward a few select brand names out of familiarity or concerns about quality.

Apple's iPod seems to be entering the habit stage. The company's music player, which contains a 1.8-inch hard drive from Toshiba, remains one of the most popular portable music devices on the market, but it grew to prominence when Apple virtually had a near monopoly over the supply of small drives.

Now Hitachi and others are cranking out minidrives that will go into lower-cost players of about the same size and shape as the iPod. Some might even look better. Recognition and brand identity, though, will likely continue to fuel iPod sales.

After that comes the final stage, in which price rules all, and the thing that once defined the future is on display next to some open boxes of Armor All in a convenience store.

Despite the difficult odds, PC companies could succeed with some of these new consumer electronics products. Televisions with liquid-crystal displays solve one major household problem: They are far thinner than those with the traditional cathode-ray tubes. Computer manufacturers also understand the underlying technology, from years of selling LCD monitors. Consumers that need to economize can use an LCD screen for both TV and PC purposes.

But are disgruntled teens going to express their antiauthoritarian stance with an HP camera phone? Is there such a thing as a Dell lifestyle? These companies may not be the right candidate for the job.