Economic Life of PCs to Shorten to Two Years, IDC Says

FRAMINGHAM, Mass., January 17, 2000 — Personal computers are barely managing to hold their value for three years. This is the message of a new International Data Corporation (IDC) report on the life cycle of personal computers. According to IDC, year three is really the last point at which PCs hold any measurable amount of value, and all indications show that value is shrinking into the second year.

"Vendors will continue to lower price points as faster processors are introduced and continue to replace their most expensive, best equipped systems with even better systems at the same price point," said Kevin Burden, senior analyst with IDC's Asset Management Services research program. "As long as users are able to continually buy more robust PCs at lower price points, economic life cycles will continue to shrink — and this will certainly be the case for the foreseeable future."

If companies are to get the most from their PC investments, they need to understand the life cycles of the different PCs they have installed and their value on the used market, according to Burden. "As companies cycle out older systems for newer ones, they often find the cost to get rid of PCs exceeds their value in the used equipment market."

Separate IDC research shows it can cost as much as $250 to simply remove a PC from its work area after tallying the labor involved in physically removing the system and network components, disconnecting peripherals, scrubbing the hard disk of software and sensitive company information, and figuring in the loss in user productivity during the downtime.

It is possible for companies to cover these disposal costs if they retire their PCs while they still have value in the used market. But the key to this timing strategy is knowing the current fair market value of used PCs, as well as having a residual value forecast showing what the systems will be worth in the future.

While Intel's pace of change holds the greatest influence over PC economic life cycles, corporations do have some say over technological life cycles. "Standardizing on a stable platform, playing out the full useful life of systems, and upgrading various components may potentially lengthen corporate PC life cycles, but don't count on it," Burden said.

IDC recently published Personal Computer Life Cycle Report, November/December 1999 (IDC #B21084). This report examines the present and future value of Intel-based desktop personal computers. The report shows current fair market values as determined by numerous interviews IDC held with third-party brokers and leasing companies. The report also forecasts residual values through the year 2005. To order a copy of the report, contact Patrick Steeves at 1-800-343-4952, ext. 6787 or at psteeves@idc.com.

About IDC

IDC delivers dependable, relevant, and high-impact data and insight on information technology to help organizations make sound business and technology decisions. IDC forecasts worldwide IT markets and technology trends and analyzes IT products and vendors, using a combination of rigorous primary research and in-depth competitive analysis. IDC is committed to providing global research with local content through more than 500 analysts in 42 countries worldwide. IDC's customers comprise the world's leading IT suppliers, IT organizations, and the financial community. Additional information can be found at http://www.idc.com.

IDC is a division of International Data Group, the world's leading IT media, research, and exposition company.

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