April 20, 1998, TechWeb News
Lower Prices Slam Top Vendors
By Roger C. Lanctot
New York - Average prices fell at double-digit rates in most computer
hardware categories last year, but manufacturers were able to produce unit
and revenue gains in all major categories.
Desktop-computer manufacturers faced the most difficult test. Average prices
in 1997 fell 15.6 percent compared to 1996, and desktop-computer makers
began limiting returns from retailers. They also tailored programs for large
up-front purchases, designed to maximize sell-through for particular models.
For the year, unit sales grew nearly 20 percent and revenue increased about
1 percent, according to audited retail sales data from PC Data, Reston, Va.
The strategy allowed larger companies to survive a trying year, but forced
Toshiba America's retail desktop computer group temporarily to the sidelines,
and finished PC-cloner Vision Technologies. By year's end several other
clone-makers turned to Cyrix and AMD for lower-cost alternative
processors, just to survive.
Flatbed scanners were situated at the other extreme. A huge increase in unit
sales volume more than compensated for the decline in flatbed-scanner
prices. Average prices for color flatbed scanners fell more than 50 percent,
and unit sales more than tripled, causing a 58.2 percent increase in retail
revenue for the category.
The average price of a color inkjet printer fell 14.8 percent between 1996
and 1997, but unit sales increased by 22.6 percent.
Similarly, the average price of a desktop modem fell 11.5 percent, but unit
sales increased 31.7 percent, compared to 1996. Laser printers saw a
modest 6.5 percent decline in average retail price in 1997 and a 15 percent
increase in unit sales.
Notebook computers increased their contribution to retail revenue by 48.2
percent in 1997, thanks to a 69.4 percent increase in unit sales. That gain
came despite a modest 12.5 percent decline in average retail prices.
The average notebook computer in 1997 cost $2,250, compared to $2,572
in 1996. The average desktop computer price fell from $1,729 in 1996 to
$1,460 in 1997.
Copyright (c) 1998 CMP Media Inc. |
