While on the tpoic of PC history, it appears that history indeeds repeats itself.
[link|http://news.cnet.com/news/0-1007-200-6793962.html?tag=mn_hd| Tech sector could learn from the '80s]
By Larry Dignan
Special to CNET News.com
August 7, 2001, 4:00 a.m. PT

If you're a tech investor, it may be a good idea to brush up on some history from the 1980s.

No, not the Atari, big hair, Flock of Seagulls and Ronald Reagan version of the 1980s. The 1980s that witnessed tech stocks founder for about five years from 1984 to 1989.

An increasing number of market strategists are looking back to the 1980s to get a read on the current environment for tech stocks. The theory is that the tech sector is currently in a transition period not much different than that of the mid-1980s, when an initial-public-offering boom turned to bust, venture capital dried up, and companies that used to be leaders became laggards.

"Although no two time periods are exactly alike, we do think the similarities are too great to ignore," Steven Milunovich, a Merrill Lynch tech strategist, said on a conference call last week.

According to Milunovich, the tech sector runs in 10- to 15-year waves. At the start of each wave, the sector undergoes a major transition. In the 1980s, it was the switch from mainframes to PCs. Today, it's the switch from PCs to the Internet and network computing.

The catch is that these transitions don't happen overnight, and new companies normally supplant old tech leaders, he said. In the 1980s, big tech names such as Honeywell and Control Data gave way to Intel and Microsoft. Who's next?
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A comparison of the two periods lends credence to Milunovich's theory. There was an IPO boom in 1982 and 1983, where PC and disk drive companies became Wall Street favorites. The boom became a bust after the euphoria led to a glut and price competition.

Tad LaFountain, an analyst at Needham, remembers a 1984 Intel analyst meeting where then-CEO Andy Grove noted that there were 20 PC makers all angling for 20 percent market share. "You can do that math all day and see it wouldn't work," he said.

Indeed, many PC clone makers and disk drive companies disappeared.

Fast-forward to 1999 and early 2000, and you find communications and dot-com companies disappearing. A boom encouraged too many players to enter the Internet fray.