Written by David Tebbutt, PC Dealer 07/88 item 01 - scanned
IBM's trade-in to spur on PC Arthur Daleys
By David Tebbutt
How much time do you spend just 'keeping up' with what's going on in this industry? I bet it knocks a huge hole in your weekly schedule. Yet you don't really have any choice, it's either that or get left behind.
In the space of three weeks recently, many of you will have tracked the Unix User Show, Networks '88, IBM's OS/2 applications forum, Compaq's two 80386 announcements, IBM's Silverlake launch and Microsoft's renewed commitment to Hewlett Packard and New Wave. And that's only half a dozen items from the hundreds you will have scanned during the same period.
Okay, I know you superhuman value added resellers can keep up, but what about all those ordinary folk out there?
Within a day or so of asking myself this question, an answer appeared in the shape of IBM's next wheeze. IBM US is reputedly planning some sort of trade-in scheme for old PC XTs and ATs to encourage the take up of Micro Channel-based products.
If this comes about, it has the potential to generate a new layer of activity in our marketplace. One which might be entirely suited to the ordinary folk.
We're always banging on about how this, that and the other move 'legitimises" an activity. Recently, the OSF initiative was said to legitimise Unix. No doubt if Compaq had announced an MCA machine this would have legitimised the Micro Channel Architecture. Now, if it's not careful, IBM might be about to legitimise the secondhand computer business.
If it succeeds, we'll soon see the aspiring Arthur Daleys of this world bringing their secondhand car sales skills to our business. It will widen computer ownership and increase the revenue of legitimate dealers as the buyers realise they have to go to a 'proper' dealership for service, repairs, software and add-ons.
As the corporates offload their unwanted PCs and take up the trade-in offers, the world could become flooded with cheap machines. People who wouldn't normally give computers a second glance could now be tempted, especially if the price was low enough. (And the sales pitch sharp enough.)
The corporates who have already written off their computers might be glad to make a few bob on something the accounts department regards as valueless. Such an outpouring of cheap PCs from the PS/2-committed corporations will make life difficult for the low-cost clone makers (and therefore the future IBM competitors) because buyers will now be able to get the ultimate in compatibility - an IBM PC.
Of course, things might not work out like this. The corporates may prefer not to sell, they may decide to move the defunct machines to non-users elsewhere in the company.
This great trade-in scheme will have to be operated through the dealers and my guess is that they will find it a hugely unwelcome distraction. They'll probably keep back the odd 'clean' model (one previous owner, never driven above 8MHz) and flog the rest to the highest bidder.
Apparently, IBM will be prepared to buy the trade-in machines off dealers, but the question is how much it will pay.
If IBM puts in the highest bids, then the secondhand market is dead. If this scheme is all about taking the old style PCs out of circulation and getting PS/2s in, then I reckon IBM will put a hammer through each traded machine, to ensure it's never used again. But, since IBM is said to be encouraging its dealers to lease or sell the machines, this would suggest that IBM won't be offering very much at all.
This would leave the field clear for Arthur Daleys and a thriving secondhand business. This, in turn, will lead to a prolongation of the DOS standard and a lot of activity at the bottom of the market, as a whole new raft of users is sucked in by the bargain offers.
Eventually, I reckon, we'll all gain from that.