SUB 1K PC'S ANOTHER OPINION ARTICLE
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Sub-$1,000 PCs expected to continue domination -- HP has
banner PC sales in July; Compaq unit sales double in
August
By Roger C. Lanctot
New York-If back-to-school trends are any indication, sub-$1,000
computers will continue reshaping the retail landscape in Q4, for the first time
paving the way for acceptance of a broad range of non-Intel processors.
The main earth mover will continue to be Compaq Computer, which doubled
its unit sales in the retail channel in August, according to audited sales data
from Intelect ASW Marketing Services, based here and in Port Washington,
N.Y.
Those results were corroborated by PC Data, the Reston, Va.-based sales
auditing company, which reported that August was the strongest month for
computer sales thus far in 1997.
Much of the retail sales bulge came from two Compaq models- the Presario
4504 and 2200-which were the top two sellers during August, according to
PC Data. One-quarter of all retail unit sales and 17 percent of retail PC
revenue derived from the two Compaq models and Packard Bell NEC's
L198, another sub-$1,000 computer. PC Data reported that retail PC unit
sales grew 36 percent compared with August 1996, while revenue grew by
only 11 percent. Similarly, August retail unit sales grew by 10 percent over
July '97, but revenue grew by only 3.5 percent.
"It's great there's a lot of unit sales growth," said Stephen Baker, senior
analyst at PC Data. "But it's becoming harder to show revenue gains."
Average selling prices for August 1997 PCs at retail were 18 percent below
last year, and 6 percent below July '97, hitting a new monthly low of $1,425,
Baker said.
Intelect ASW reported retail unit sales up 22 percent compared with last
August, with a 38 percent unit gain relative to July '97.
While Hewlett-Packard took the second-place position in the retail channel in
July, according to reports from PC Data and Computer Intelligence, La Jolla,
Calif., Packard Bell moved ahead of HP in August. Retailers and analysts
said HP's success in July was the result of line transitions at Compaq and
Packard Bell that resulted in empty shelves in some stores. As a result, HP
had the two best-selling PCs in July:the Pavilion 7410 and 7420.
According to Intelect ASW, HP showed a 72 percent gain in unit volume
relative to August 1996, but finished third overall.
"We set out to be No. 3 at retail within two years of entering the market,"
said Chris Pedersen, worldwide consumer-PC brand manager for
Hewlett-Packard. "We believe we reached that goal during the Christmas
season last year, but we haven't been a clear No. 3. Now our goal is to be a
clear No. 3."
For August, PC Data ranks HP in third place, with 12.2 percent of retail unit
sales and 15.1 percent of revenue. Compaq is in first place, with a dominant
37 percent of unit volume and 33 percent of revenue. Packard Bell NEC is
No. 2, with 17.1 percent of unit sales and 14.6 percent of revenue.
Unit sales growth over July was primarily in Pentium II processors and
equivalents, which tripled their volume over the prior month, according to PC
Data. Compaq sold more Pentium and Pentium MMX machines than any
other vendor. Packard Bell, after experiencing increasing weakness in the
past few months, returned to second place as a result of having three of the
top five SKUs, including the two best-selling MMX PCs.
HP should see sales gains this fall with the shipment of its first $999 PC, the
Pavilion 3100, a slimline unit with a 166MHz MMX-equipped Intel Pentium
processor. HP expects retailers to begin advertising the model this month. |
