Paul and Thread:
How's this for a story?
dailynews.yahoo.com
Friday March 19 12:49 AM ET
Computer Home Ownership Hits 50 Percent
By Dick Satran
SAN FRANCISCO (Reuters) - Over half of all homes in the United States now have personal computers, a leading market research firm said Thursday, citing a surge in sales the past two years led by falling prices and Internet fever.
The La Jolla, Calif.-based market research firm InfoBeads, a unit of publishing company Ziff-Davis Inc (NYSE:ZD - news), said in its annual survey released Thursday that 50.3 percent of homes had computers at the end of 1998, compared with just over 40 percent two years ago.
In the past year alone, six million new households have become computer homes, InfoBeads reported, adding 5.5 percentage points from a year ago.
''Whether it's 48 percent or 52 percent -- it doesn't really matter,'' said David Wu of investment bank ABN/Amro. ''The important thing is that PCs have become, with the Internet, a must-have item in American homes. And with prices still coming down, it will become even more pervasive.''Music to my ears
Analysts say that the PC's growth is likely to continue at nearly the same pace in the year ahead, and that the high level of use in the United States could push momentum abroad.
''It's like keeping up with the Jones's -- if they got a new car, you need one too,'' said analyst Schelley Olhava, of research firm IDC. ''We're seeing that in some parts of Europe, looking at America, they're saying 'We need to get up to speed.' We see that as one of the factors driving industry growth this year.''
Domestically, too, a critical mass has been reached that adds pressure on those who have not yet bought a computer.
''We see double digit growth into the future as far as the eye can see,'' said ABN Amro's Wu.
The personal computer has the potential to approach television as a pervasive home appliance, but its impact could be much more profound, said Hal Varian, dean of University of California, Berkeley, School of Information Systems and Management.
''The potential for the PC is much more promising than television -- because it's interactive. It's not just people sitting in front of a tube,'' said Varian.
The Internet has become a key driver in the latest computer growth spurt, said InfoBeads. But analyst Sargent said that the most-used application in homes is still playing computer games, ''and that's been consistent from the very start of the PC era.''
The Internet has created a ''drum-beat'' that made computers an ''essential device,'' but without falling prices, potential buyers might have stayed out of the market.
''For a lot of households that had not considered buying because of the cost, that barrier is being broken down,'' said Sargent. ''At $1,500, buying a computer was a much bigger decision than $500.''
While low-priced competitors like Ace and Packard Bell led the charge to sell PCs below $1,000, computer giants like Hewlett-Packard Co (NYSE:HWP - news), Dell Computer Corp. (Nasdaq:DELL - news), Compaq Computer Corp (NYSE:CPQ - news) and International Business Machines Corp. (NYSE:IBM - news) quickly responded with their own low-priced deals.
Another round of price cuts at the end of last year pushed prices below the $500 mark, led by South Korean-owned eMachines Inc, which expects to sell $1 billion worth of computers in its first full year of business in 1999.
''To make the kind of jump we've made, when penetration was already high, shows that price is a huge issue at this time,'' said Sargent
Despite the price declines, Sargent said that there has been no big breakout in buying by those with incomes below $30,000.
With some 30 million people in the income category between $10,000 and $30,000, it's a large market that's still not being touched, and has also raised worries about high-tech inequality in the United States. But Sargent, who noted that the biggest price drops have been seen over the past two months said, ''We expect a pickup in lower-income groups going forward.''
The survey was based on questionnaires mailed to 50,000 homes in the United States, across the entire economic spectrum, said Sargent. He said it was one of the largest consumer surveys done in the computer industry.
-----------
Remember that chart in Forbes from 1996 that I posted recently? PC adoption rates are moving up as fast as ever.
There's a new world coming soon.
Barry |
