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To: Road Walker who wrote (40491)	11/16/1997 8:59:00 PM
From: greenspirit	Read Replies (1) \| Respond to of 186894

Hi John, Article...Big Sales for PCs Under $1,000 BY DAVID EINSTEIN c. 1997 San Francisco Chronicle A year ago, the idea of a powerful, fully configured personal computer for less than $1,000 seemed farfetched. Not anymore. When the PC industry gathers in Las Vegas for the annual Comdex trade show, one of the hottest topics will likely be the explosive success of sub-$1,000 PCs, which now account for about one-fourth of all computer retail sales. The biggest PC makers, including Compaq, Packard Bell and IBM, are falling all over themselves trying to cram leading-edge technology into entry-level machines that they can sell for less than a grand (that's without the monitor, which is usually an option for $250 and up). The result has been a boon for consumers, for whom PCs are becoming as affordable as big-screen TVs. The success of the sub-$1,000 category suggests that consumers are starting to consider PCs as home electronics appliances for which technical specifications are a matter of overkill. The same trend has been followed by other products, including cameras and stereo equipment, which got to the point where basic performance was the same no matter what you bought. It's not hard to see why cheap computers have attracted a following. They come with powerful chips, big hard drives, fast CD-ROM drives and are fully capable of running most Windows software. Take for example IBM's new E16, introduced two weeks ago as the giant company's first entry in the sub-$1,000 market. It boasts a 166-megahertz chip from Advanced Micro Devices with MMX multimedia enhancements, a 2.1-gigabyte hard drive, a 20-speed CD-ROM drive, 3-D graphics and a 56-kilobits-per-second modem. For $1,500 to $2,000 you could get a faster chip, more memory and a bigger hard drive, but it wouldn't let you work any better in Word for Windows or surf the Web any faster. That's because very few software programs require the blazing technology of a high-end PC. Hardware technology advances faster than software technology, according to James Staten, an analyst at the Dataquest research firm in San Jose. ''Machines a year old can run the latest software pretty well.'' The driving force in creating the sub-$1,000 market has been the continual drop in prices that PC makers pay for components, especially processors. Chips for entry-level machines now go for less than $100, (versus more than $700 for Intel's latest Pentium IIs), and the prices are sure to drop even more as Intel dukes it out on the low end with challengers AMD and Cyrix. Those companies make it a point to undercut Intel prices by about 25 percent. That translates into good deals for PC makers, who use non-Intel chips for most entry-level systems. The brisk sales of the systems suggest that buyers will gladly live without an Intel chip if the performance is solid and the price is right. PC makers initially were reluctant to sell really inexpensive systems, fearing they would hurt business at the high end, where profit margins are juicier. While some of that has occurred, analysts said it looks as if the sub-$1,000 PCs have done more to expand the market than cannibalize it. That's because a majority of the new low-priced machines are being sold to people who already own PCs _ folks who probably wouldn't pay $1,500 for a new one, but can be enticed by the magic $1,000 barrier. The typical buyer of a sub-$1,000 is ''a parent who uses the PC in the den for work but up until now has had to share it with the kids,'' said Tim Bajarin, president of Creative Strategies in San Jose. ''Existing users are buying them as second or even third PCs.'' Sub-$1,000 PCs from companies such as Hewlett-Packard and Digital Equipment are also starting to show up in the workplace, where corporations are using them to replace older desktop systems. Industry experts note that many workers who do data entry and other straightforward jobs don't really need a Pentium computer. And a sub-$1,000 can be integrated into a corporate network just as easily as a higher-end machine. ______________________________________________________ Michael

To: Road Walker who wrote (40491)	11/16/1997 10:46:00 PM
From: DownSouth	Respond to of 186894

>I still believe the industry as a whole is doing a lousy job of marketing computers. They are lined up with no logical progression, most POP is based on specifications which the average consumer doesn't relate to, there is no selling of real life benefits. My best guess, most potential first time buyers walk because of confusion and lack of compelling reasons to purchase. Couldn't agree more. Just to make sure the customer is completely confused, the "clerks" (will not call them sales staff) generally don't know what the specs mean and have no idea how to spell "benefit". When I, a computer professional, go into a CompUSA, I must close my ears, keep moving, and struggle to keep my big mouth shut, because 9/10 times I pay attention to a "sales pitch" I hear a bunch of crap. (Excuse me for jumping in here, but you hit one of my not buttons.)