From...

December 31, 1998
Web posted at: 7:46 PM PT

by Eric Bender

(IDG) -- This was not the best of years for Bill Clinton, Bill Gates, Saddam Hussein, Newt Gingrich, National Basketball Association players, and a few other folks with whom you might or might not sympathize. But 1998 was a very good year for those of us buying PCs. Almost every type of hardware, and many software products, grew more powerful and cheaper. The dread Year 1.998K bugs weren't bad. Even Windows became a tad more stable, if not cheaper.

Among the highlights, not necessarily in order:

PC PRICE/PERFORMANCE KEEPS SOARING: A year ago you'd pay $2649 for a PC World Best Buy Dell Dimension XPS with Pentium II-266 CPU, 64MB of memory, 8.4GB hard drive, graphics card with 4MB of memory, 17-inch monitor, sound card, and speakers. Today for the same price you can buy a Dell Dimension XPS R with a Pentium II-450, 128MB of memory, 17.2GB hard drive, a more advanced graphics card with 16MB of memory, 19-inch monitor, fancier sound card and speakers, and a built-in Zip drive. Actually, now you'd spend a little less.

SOME PCS GET REALLY CHEAP: Intel got genuine competition in entry-level CPUs this year from AMD and Cyrix, memory costs dropped, and some other components got cheaper. Result: The average price of PCs sold at retail stores or mail-order dipped below $1000 in November, not even counting rebates, says market surveyor PC Data. Not to be outdone, International Data Corporation predicts that PCs will be sold in grocery stores in 1999. Low-end pricing is still falling, as several vendors offer sub-$500 models. E-Machines, for instance, offers a complete system based on a Cyrix M-II 266 for $499 with rebate. OK, the specs are underwhelming -- just 32MB of memory, a 2.1GB hard drive and a 15-inch monitor. But if I bought one for my daughter, I could surf the Web in the evening again...

IS THE UNIVERSE STILL EXPANDING, OR JUST HARD DRIVES? Yes, that latest Dell Dimension mentioned above really does ship with a 17.2GB EIDE drive from Maxtor, and you can buy such a drive for your very own for around $400.

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SPINNING UP CDS: The CD-ROM got a lot faster this year. Plextor unveiled one SCSI drive that works up to 40 times as fast as original CD-ROM models -- in fact, spinning faster than most hard disks. CD-Recordable (CD-R) and CD-Rewritable (CD-RW) also got faster, reading at CD-ROM speeds and writing at as much as 8X and 4X speeds respectively. More strikingly, some recordable models dipped below $400, with CD-R discs costing a couple of dollars and CD-RW discs around $10. For many people, that's plenty affordable, and preferable to a stack of Zips.

DEFINITELY VERY DESIRABLE: Here's the good news and bad news about Digital Versatile Disc (DVD) and its recordable brethren. Good news: The cost of adding a DVD drive to a new PC dropped to about $150, upgrade kits are going for slightly more, and the latest generation is fast and compatible enough to substitute for a standard CD-ROM drive. Bad news: Almost no DVD titles have hit the streets for PCs (as opposed to home theatres). Worse news for DVD spin-offs: Two major formats are competing (DVD-RAM and DVD+RW), with big compatibility problems.

WEB GETS WIDER: You've heard this before: The World Wide Web is still growing by leaps and bounds, almost as fast as Internet stock valuations. The spread is particularly impressive in this country. By mid-year more than 60 million PCs in the United States (and more than half the PCs in use) were connected to the Internet, according to ZD Market Intelligence. And about 30 percent of users stay online for more than 10 hours a week.

THE SHOPPING STATISTICS: The Web is finally solving the great mystery that has puzzled millions for generations: How to spend more on consumer goods, and more quickly. The mad onrush of holiday shopping trampled worries about privacy and security, with U.S. sales for the whole year estimated at $6 billion and up (way up).

NOT A MODEM TOO SOON: Modem makers and ISPs alike adopted the 56kbps v.90 standard. This is about the end of the line for boosting analog modem performance, except for the temporary fix of "bonding" together multiple modems on multiple lines. Among digital approaches, most telephone companies still make it difficult and expensive to use ISDN modems. Two speedy alternatives -- cable modems and various flavors of Digital Subscriber Line (DSL) modems that use standard phone lines -- have been adopted quickly where they are available. Mostly they're not available, though. Only about one in seven households that can get cable TV can subscribe to cable modem services. For DSL, adoption of a new G.Lite standard in June should jumpstart telcos toward offering the new service widely, unless they try to recap their ISDN strategies.

KINDER, GENTLER WINDOWS: Debuting in June, Windows 98 sold more than 10 million copies by October. While some users had grim experiences making the upgrade, most didn't and found Win98 more stable and more powerful than its predecessor. Some of the strongest Win98 disparagement came from Microsoft itself, as it talked up the more expensive Windows NT as the real business operating system. Running rather late, Microsoft renamed WinNT to Windows 2000, presumably since the company is fairly sure the product will ship by then.

THINK DIFFERENT, AND LIVE: Apple Computer made a strong comeback, turning a yearly profit, and launching the highly successful iMac in August. With its all-in-one translucent aquamarine case, the iMac did indeed look as if it came from another planet ("one with better designers," quipped chief executive officer Steve Jobs) and was priced reasonably at $1299. By November, iMac was handsomely outselling all other personal computers in retail and mail-order outlets, accounting for seven percent of all sales, reported PC Data. Expect price cuts next week; some vendors already have whittled it down to $1000. But while the Mac retains its faithful legions among graphics/multimedia creators and schools, precious few software vendors are writing Mac applications for the rest of us.

BROWSING BATTLES: A year ago, Internet Explorer 4.0 was a risky upgrade to Windows 95, and Netscape's Communicator was not free. Now it's hard to avoid the two browser kingpins, with IE bundled into Windows 98 and Communicator backed by Netscape's new (pending) parent, America Online. Both browsers received a steady stream of patches and minor upgrades -- many addressing minor security bugs. Now IE 5.0 looks polished in a public beta, with Communicator 5.0 a few months behind. But "buggy browser" is still redundant.

E-MAIL JUST WANTS TO BE FREE: You say you haven't picked up your free Web-based e-mail account at Hotmail, or Yahoo, or Excite, or a dozen other sites? Well, why not? These free accounts can be a lifesaver when your regular mail account goes bonkers (a fairly regular occurrence for mine) or if you want to travel without dragging along a notebook.

MUSIC JUST WANTS TO BE FREE: MP3, the Web's most popular music compression format, lets you download "digital-quality" music from a zillion sites. Unsurprisingly, some of this music is pirated. Also unsurprisingly, this gives record-company executives nightmares. One result is a lawsuit against Diamond Multimedia for releasing its Rio portable MP3 device, which seems like a case of closing the barn door after the horse is running in the Kentucky Derby.

FILM GETS PIXELATED Digital cameras grew dramatically better and cheaper. Your 35mm standby isn't obsolete yet, but the day approaches. Today's megapixel models (creating images with at least a million pixels) let you print crisp 5-by-7-inch photos, and you can snap one up for $500 or less.

SPEAKERS GO FLAT: Listening to three-dimensional "surround" sound is great, but surrounding yourself with bulky speakers is a hassle -- especially if you're in an office rather than a living room. Sonigistix has introduced a new breed of flat-planar computer speakers, about the size of a paperback. The $229 Monsoon MM-1000 package includes two of these satellite speakers along with a subwoofer, and provides excellent sound.

THIS LAN IS MY LAN: If your home is like my home, you've got multiple working PCs, multiple people who want to use them, one decent printer and one Net connection. Many vendors bet that many folks like thee and me are willing to pay a few bucks to set up our own home networks. Approaches vary widely, ranging from conventional adapters to wireless to electric-power networks. Perhaps the most promising is HomeRun, a 1mbps setup for your existing phone lines priced below $100 per PC, backed by a broad coalition of system and peripheral vendors.

LISTEN UP, PC: Always a bridesmaid and never a bride, voice recognition finally got engaged to the PC this year. Dragon Systems, Lernout & Hauspie, IBM, and a host of challengers released a flurry of working products, with prices and features tailored for different needs. Expect this trend of customization to continue, and to see voice recognition in small devices like Dragon's NaturallyOrganized dictation machine.

BOOK 'EM, DANNO Electronic books probably take the place of voice recognition as Digital Technology Most Likely to Succeed but Not Yet. Working e-books shipped in 1998, and some even offer a fair selection of titles to download. But you pay a hefty fee for the device and downloaded titles, and the devices are clunkier and harder to read than paper books.

MONITORS SLIM DOWN: For years the excitement in the monitor market could be described as, well, minimal. Display quality inched up, prices drifted down. But 1998 was different. Flat-face CRT models with striking displays began shipping in volume. Then came a rush of LCD flat-panel monitors that offer very sharp images without hogging most of your desk, and prices dropped below $900. And prices on more conventional 19-inch CRTs tumbled to around $600 to $800, about the cost of last year's 17-inch models.

CHEAP, CHEAP, CHEAP: Just about every kind of PC hardware grew less expensive. You can get powerful Win98 notebooks for $1100, attractive WinCE mini-notebooks for less than $900, positional 3D audio cards for $50, color laser printers for $1300, and scanners for $50 (from those few scanner companies that remain in business after the price wars). All these savings leave us more resources to address ...

THE END OF CIVILIZED LIFE AS WE KNOW IT: Ironic, is it not, that the Information Age is running on 30-year-trial software? Fortunately, all the dire Y2K predictions have unleashed an extraordinary effort to fix the very real problems. While PCs will suffer, they won't be the weakest links. (For a step-by-step plan for checking out your PC and software, see the "2000: The Year of Living Dangerously" link below) Personally, on that fateful New Year's Eve I plan to avoid having surgery while airborne. But I'll probably end up drumming my fingers on a darkened ATM machine, and dreaming of the golden days of 1998. (Just kidding -- I think.)