PC Sales to Rise On Consumer Holiday
Season Surge
PC Sales to Rise on Consumer Holiday
Season Surge (Update1)
Bloomberg News
November 4, 1998, 2:50 p.m. PT
PC Sales to Rise on Consumer Holiday Season Surge (Update1)
(Adds details on PC dollar sales growth in 8th paragraph.)
San Francisco, Nov. 4 (Bloomberg) -- Personal-computer sales
are expected to surge during the next few months as consumers
flock to stores to buy new machines, many spending more than
$1,000 each for extra bells and whistles.
More than 10 percent of households are ''very likely'' to
buy a new PC this holiday season, based on preliminary results of
a survey by researcher MarketMaps. Buyers plan to spend $1,500 on
a PC, MarketMaps said, plus as much as $400 on software,
printers, scanners and other extras.
''This is going to be a better holiday season than last,''
said analyst Bill Ablondi of MarketMaps. Last year, less than 10
percent of households planned to buy a PC, he said.
PC unit shipments are expected to rise 13 percent in the
fourth quarter, their biggest gain all year. About a third of all
PCs are sold in the final three months of the year.
That will be good news for Compaq Computer Corp.,
International Business Machines Corp., and Hewlett-Packard Co. PC
makers are anxious for the wave of buyers, as they spent the
first six months of the year getting rid of extra inventory and
slashing prices on older models. Even Dell Computer Corp., which
has done well amid all the turmoil at rivals because it carries
no inventory, is expected to do well because corporate sales will
be strong.
Cheaper Models
Now, new cheaper models are being introduced, inventories
have been whittled down and consumers are ready to buy new
computers with faster chips and the new Windows 98 operating
system from Microsoft Corp.
Intel Corp. and Advanced Micro Devices Corp. have both cut
microprocessor prices on PCs for consumer buyers, as well as some
for corporate machines. That has prompted price cuts by
manufacturers like H-P and Dell.
Machines that cost less than $1,000 remain popular and are
attracting buyers who wouldn't have bought a machine at the
higher prices, which is helping expand the market, but keeping on
lid on revenue growth. Sales are forecast to rise about 6 percent
in the quarter.
Still, systems costing more than $1,200 are selling well,
analysts said, and that's good news for PC makers, which usually
make more money on the more expensive PCs.
PC Data Corp., a market research firm in Reston, Virginia,
says that the $1,000 price is the ''mode'' in the market, meaning
about half of PCs purchased cost less than that and about half
cost more.
''This coming holiday season for retailers selling PCs is
going to be very good,'' said analyst Martin Goslar of Cahners In-
Stat Group.
Also helping sales will be strong demand from corporate
buyers, which represent about 65 percent of the $180 billion-a-
year PC market. Companies, too, are taking advantage of lower
prices and updating their systems. |
