Reflections on a Fry's Ad

The End of the Beginning?

A Remarkable Advertisement

At first glance, it appears to be a perfectly ordinary advertisement, on the front page of the Friday Fry's flier. (For those who aren't familiar with it, Fry's is a chain of electronics stores that started in the San Francisco Bay Area a decade or so back. The flier is an 8-page, full-color-on-the-outside insert in the Friday newspaper. Their web site can be found at This particular ad appeared on Friday, January 11th, 2002.)

The ad, in glorous color at the top of the front page of the flier, is titled ``INTERNET READY MULTIMEDIA PC'' and the too-good-to-be-true price is $299 *no rebate required* -- WOW! (I've tried to render the ad as faithfully as HTML permits). It has everything one could reasonably expect: 733MHz Cyrix processor, 128MB RAM, 20Gb hard drive, 10/100 ethernet, 56K modem, Linux, ...

Huh? Back up a minute!

Sure enough, there in black and white is a bullet point that reads ``Linux 1.3 Shell with Web Browsing, E-mail and Word Processing capabilities.'' (The next bullet reads ``Upgradeable to Windows XP'' -- I'm certain that's a typeo for ``downgradeable'', and what the heck is ``Linux 1.3 shell''? But let's continue.) Two pages later there's an ad for an eMachines box with remarkably similar specs -- a faster CPU but no ethernet -- for $50 more after a $75 mail-in rebate. So the Micro$oft tax, and the in-store price difference, looks pretty close to $125.

A couple of weeks later the same machine showed up with Windows XP on it for the same price -- after a $100 mail-in rebate. This morning they were back to hawking the Linux machine; apparently not enough customers were willing to front the extra C-note and risk the inevitable hassles with the rebate. No surprise there.

Now, $299 is one of those magic numbers in consumer electronics, just as $999 is in the corporate world: it's one of those price points where somebody can easily draw a line between ``Hey! that looks neat!'' and ``Maybe I'd better do some comparison shopping on this one.'' It's no coincidence that game consoles, DVD players, and the like and the like tend to have prices clustered around $299 (or $199). A family of four can spend $299 on a weekend's worth of entertainment, no problem.

Let's put it another way: for the price of the low-end laptop advertised for $1299 on the same page, I could get four of these little boxes and have enough left over for a DSL router/firewall/hub to share them with.

Further investigation, by actually driving down to the store and looking at the thing, reveals that the ``shell'' is a kiosk-like, dumbed-down, single-user ``internet appliance'' interface somewhat reminiscent of the one in the ThinkNIC. There didn't appear to be any way to get a shell prompt, but it did have Netscape and WordPerfect.

Of course, even if they don't provide an escape from the shell, upgrading to a full distribution would be a simple matter of booting from the CD and answering a handful of questions; you could probably have Mandrake or RedHat running in half an hour. But I can't think of anything better-calculated than that shell to counter the notion that Linux is complicated -- a six-year-old could handle it with ease.

An additional note: a month later the price has dropped to $250.

But no matter what software is on it, this is an important event.

What Just Happened?

What just happened was one of those events that are completely unnoticable when they happen but are nevertheless noteworthy in hindsight, like crossing the Equator for the first time or the moment when hard drives became cheaper than paper for storing document images. We've crossed an invisible line.

It may seem that the important milestone is that, for the first time, an ordinary consumer can walk into an electronics store and buy PC's with a choice of operating system. They can see the difference in price -- and we're not talking small change, either: $100 is a third the price of the whole box itself. Even Joe Sixpack can figure out how many game tickets it will buy. But that's only part of the story.

The consumer market, as we all know, is extremely price-sensitive. For years the most expensive component in a PC has been Windows. With Palm and WinCE, licensing is a substantial part of the cost of a PDA as well. Suddenly that's no longer true, and with Linux the cost of hardware with software is free to get back on the Moore's Law curve. That's the real line we've crossed: we've gotten past the Microsoft plateau on the price curve.

For a long time, Microsoft has enjoyed a monopoly on desktop software. Unlike the cost of hardware, which is declining slowly year after year, or the cost of memory and computation (MIPS/dollar), which diminish exponentially, the price of Microsoft's software has been increasing steadily. The memory and storage requirements have been increasing exponentially, more than enough to keep step with the Moore's Law improvement in their actual cost. In fact, today's Microsoft bloatware performs about the same on today's hardware as last year's software did on last year's hardware. Maybe worse. And why not? Microsoft has no reason to improve.

In fact, their whole business depends on forcing everyone to upgrade their software as often as possible, and the easiest way to ensure that is to make sure that the new software won't run well on the old hardware, forcing everyone to buy new PC's with the latest version already installed. Once the new PC's enter their business, it is discovered that the newest versions of Word, Excel, and so on won't write files compatible with the old versions, so now they have to move their files and upgrade everything. Over and over again.

But the free ride can't go on forever, and Microsoft knows it. Today's computers are so powerful that even Microsoft is having trouble using up their capacity, and today's hard drives are so huge that even Microsoft bloatware can't keep them full. People don't have to upgrade nearly as often as Microsoft would like them to, and in the consumer market Microsoft can't rely on lockstep upgrades to keep all versions of Office compatible the way they can in the office.

So they're changing the model: product activation to prevent copying (and incidentally discourage upgrading), and eventually yearly subscriptions in place of upgrades. And in the home, they want to make the Windows PC the central hub for a wide variety of networked appliances: web pads, set-top boxes, PDA's, toasters, you name it. They'll all run Windows CE (or whatever it's called that year) and will talk only to a Windows server. Microsoft needs this because the PC market is nearly saturated.

But we've crossed that invisible line. This is the year that Linux hits the consumer market. People are going to discover that Linux means big, friendly icons; wide choice among splashy themes and wildly different shells and desktops; filesystems that don't fragment and degrade as time goes by; logins and file protection for every member of the family, networking that's a breeze to set up and that doesn't require a reboot to reconfigure; PC's, PDA's and network appliances that never lock up; and an operating system that never, ever, ever crashes. And at a price $50 to $100 below the equivalent in Windows.

But the real fun starts a little later, when all these consumers start wondering why their Windows machines keep crashing and getting infected with viruses and their Linux computers don't. Why their Microsoft game consoles and PDA's occasionally lock up and their Linux appliances don't. They'll start wondering what they're getting for their money. And finally they'll start to wonder why they can have cheap, reliable Linux machines at home and can't have them at work.

$Id: reflections-on-ad.html,v 1.2 2002/02/16 15:27:50 steve Exp $
Stephen R. Savitzky <>