Who's Winning the Bruising Gadget Wars
by Adam Lashinsky

(FORTUNE Magazine) - We managed to get the big picture fabulously right in our Nov. 10, 2003, cover story, "Shootout in Gadget Land," about the free-for-all emerging as the home-electronics and computer industries converge. We accurately predicted that consumers would win as prices dropped amid the fierce competition. Witness iPods with 50% more music capacity selling for 25% less than they did two years ago. Name-brand plasma TVs with better features likewise sell for just three-quarters of their 2003 price.

The trend has only accelerated since our article. Apple continues its relentless drive to place more iGadgets in your home and on your person. Microsoft is attempting to invade your living room with its Xbox 360 game consoles and revamped software. And Intel has stopped pushing chips and started pitching the digital lifestyle.

But for all our success at spotting the broader trend, we stumbled when it came to featuring potential winners. Upstart DVD maker Apex Digital, which we credited with single-handedly destroying prices in that market, has fallen off researcher NPD's top ten rankings. PC maker Gateway, whose expansion into TVs and MP3 players prompted us to portray it as--ahem--a potential competitor to Sony, has shuttered its stores and merged with eMachines, the low-end PC shop. Then there was Virgin Pulse, Richard Branson's attempt to slap his ubiquitous brand on gadgets made and designed in Asia. Virgin pulled the plug last year. Even mighty Dell--featured on FORTUNE's cover with Michael Dell holding a flat-screen TV in front of his face--has struggled. Last year Dell folded its consumer unit into the rest of the company.

"Guess Who Wants to Entertain You?" we asked. The answer, then as now: They all do. You might as well enjoy it. Top of page