56K Modems To Be Common Stocking Stuffer this Holiday Season!
10:46 a.m. Dec 12, 1997 Eastern
IRVING, Texas--(BUSINESS WIRE)--Dec. 12, 1997--Consumers can expect
great deals this holiday season on 56K modems as prices are expected to drop to
their lowest levels ever.
In addition, most vendors are offering rebates of $20 to $50 in an attempt to lure
more customers. "The price reductions combined with the rebates will push 56K
modem prices as low as $79," says Jennifer Glickman, Communications Hardware
Analyst for ARS. "The rebates and promotions will undoubtedly stimulate sales
volumes for these products and make 56K modems a hot product this holiday
season." says Glickman.
Standards Still An Issue:
Since last year's 56K-modem introduction, vendors have had a difficult time
motivating consumers to purchase 56K modems due to confusion over a standard
for 56K technology. Choosing between 3Com's x2 technology and Rockwell's
competing K56flex technology depends upon which technology a consumer's
Internet Service Provider (ISP) supports. However, 56K modem sales have begun
to increase in recent months as increasing numbers of ISPs have committed to
support both x2 and K56flex technologies. Additionally, modem vendors have
reached a preliminary compromise for the standard consisting of both x2 and
K56flex technologies.
Product Price Reductions:
Also impacting recent 56K sales was Motorola's dramatic 40% cut in their modem
prices last September, which drove many vendors to cut their 56K-modem prices in
order to remain price competitive. "According to our data, 56K modems entered the
market last January priced at approximately $185 for an internal data/fax modem,
but now the average street prices on many products are below $100 when you
factor in the rebates," says Glickman. "While customers were more reluctant to
purchase a product that they were unsure about a few months ago, increased ISP
support coupled with lower prices have stimulated sales for these products."
Retailer Promotion:
Retailers realize the opportunity that increased ISP support and price cuts have
brought to the market, and they see the holiday season as an opportunity to move
their 56K-modem inventory. "CompUSA has aggressively marketed their modems
by offering their credit card holders a $25 instant rebate on all 56K modems, except
U.S. Robotics modems (offer not good with any other coupon), through the end of
the holidays," says Glickman. "Retailers are pricing 56K modems lower than ever!
Fry's (computer superstore) has a Best Data internal 56K data/fax Mach-2 modem
available for the price of $59 and an Action Tec internal 56K data/fax modem
priced at $79."
This holiday season will give the 56K-modem market the push it has needed to
combat the consumer confusion caused by the two competing x2 and K56flex
technologies. As more ISPs support both technologies and the 56K standard starts
to become a reality, consumers will gain confidence in their decision to purchase
56K modems. Additionally, with promotions coming from retailers and vendors
alike, the 56K-modem market will see sales activity that it has yet to experience
before this holiday season.
ABOUT ARS:
ARS is a marketing research firm that specializes in tracking the high-volume PC
and peripheral channels with a focus on product marketing, pricing, and margin
analysis. The company publishes The Marketing and Promotion Summary -- a
weekly update on industry events sent via e-mail. ARS also publishes Price/Margin
Models that track street pricing and reseller cost for both the retail and non-retail
distribution channels. In addition to modems, ARS analyzes a variety of peripheral
products including printers, scanners, PCs, monitors, digital cameras, Fax/MFPs,
handheld PCs, and printer supplies. Additional details can be found on the ARS web
site at ars1.com . (See also: businesswire.com)
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