SCIENCE/TECHNOLOGY : PC Now Means ‘Profit Crunch’ for Industry, AST Chairman Says

During the 1980s, PC stood for “personal computer” in high-tech industry circles.

But Thomas Yuen, co-chairman of computer maker AST Research Inc. in Irvine, told an audience at an American Electronics Assn. luncheon this month that PC now stands for “price competition, profit crunch and professional crisis” for computer company executives.

The 1990s will be the “decade of living dangerously,” Yuen said. “It’s a hostile environment that could last five or 10 years.”

In the second decade of the personal computer, Yuen said, the industry can kiss goodby the go-go days of double-digit growth. Price competition could result in product “dumping,” or selling computers for a loss, throughout much of this year, he said.

For instance, Yuen noted, the price of an International Business Machines PC was $4,500 at its introduction in 1981, compared with $2,199 in 1991.

That pricing pressure will continue during the 1990s.

At the same time, Yuen said, new features, such as those based on multimedia technology that give PCs the capabilities of high-quality videotape and the sound quality of compact discs, will have to be added to entice the general public to embrace personal computing.

Much of industry growth will be software-driven in the future, he said. And a lot of that growth will be determined by a battle between titans Microsoft Corp. and IBM to provide the basic software that a user needs to communicate with a computer.

For hardware vendors like AST, the competition to produce faster machines may blur the categories of personal computing, minicomputing and supercomputing, Yuen said.

To keep up, AST will continue to expand its overseas presence, Yuen said.

The company has launched two lines of computers in Japan in the past two years, and Yuen said it could take several more years before the investment pays off.