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Technology Stocks : Compaq -- Ignore unavailable to you. Want to Upgrade?

To: Jorge who wrote (10020)	12/2/1997 8:27:00 PM
From: William Hunt	Respond to of 97611

THREAD --- SUB 1000 PC SALES SEPT-27 % RETAIL --December 2, 1997 Experts Think a Boom in Sales Will Make PC Industry Jolly Dow Jones Newswires Prices for personal computers, software and peripherals are falling, but some industry experts believe growth in unit sales will make up for that and ensure a jolly holiday season for the computer industry. Computers that cost less than $1,000 have been very popular in recent months and should continue to be so during the holidays, experts say. "Retailers are doing a tremendous amount of promotions on those sub-$1,000 models -- from a unit standpoint, we see decent growth over last year," said Phil Magney of market-research firm ARS Inc. in Irving, Texas. Unit growth should offset the declining average price, Mr. Magney added, as retailers are likely to shore up their profit dollars with add-on accessories, peripherals and software. Among Circuit City Stores Inc.'s top holiday picks are such peripherals as digital scanners, surge protectors, digital cameras and data-storage devices. The installed base of video-game systems should also increase dramatically thanks to lower prices and a greater number of software titles, experts say. "The [entertainment software] category is going to be very hot this year, particularly video games," said Jeffrey Griffiths, vice president of merchandising at 635-store software retailer Electronics Boutique, of West Chester, Pa. Sales have been buoyed by the greater mass appeal of Sony Corp.'s Playstation and Nintendo Ltd.'s Nintendo 64 game systems. "The weekend was pretty strong," said Bing Gordon, executive vice president at entertainment software company Electronic Arts Inc. "Our segment is going to keep building up to Christmas. We're on track for big growth." For those software companies with the top-20 video game titles and distribution capabilities, this is looking like a peak year for video game systems, said Mr. Gordon. It's likely to match the breakout 1989 year when some 50 million video-game software units were sold, he said. Software sales, which are less cyclical than sales of video games, should post a respectable 20% increase, sparked by an abundance of new releases. Sales of PC entertainment software have grown steadily over the years, and are likely to hit 50 million units in 1997. Mr. Gordon estimates that revenue for software developed for Sony's Playstation is likely to be twice last year's. And he forecasts that sales of software for Nintendo's Nintendo 64 unit -- which hasn't had as many titles as has the Playstation -- should jump as much as 300%. Piper Jaffray Inc. analyst Anthony Gikas projected the installed base of Playstation units should jump to 20 million worldwide this year, up from 10.2 million last year. Some 75 Playstation titles are slated to ship this holiday season, according to Sony. The installed base of Nintendo 64 console units, meanwhile, should grow to 11.5 million from three million. But most of the attention will be focused on the sub-$1,000 computer category. Such models have been attractive to both first-time buyers and seasoned users who want a second or third computer. The computer market is offering a greater selection of products for all pocketbooks this year, from the low-end Pentium MMX systems and equivalents to Pentium II systems. Retailers are emphasizing highly-profitable consumables such as computer supplies to offset low-margin PC sales. CompUSA Inc. a few months ago said sales of PCs selling for less than $1,000 helped overall sales by making technology affordable to a new group of consumers. The biggest PC makers have been rushing to cram more features into entry-level machines. The oft-quoted $999 price typically does not include a monitor, which usually goes for $250 and more. The success of the sub-$1,000 category suggests that consumers are starting to consider PCs as home electronics appliances. Sub-$1,000 models accounted for 27% of all PCs sold through retail stores in September. While that is down from a high of 39% in August -- the traditional back-to-school shopping season -- it was up significantly from January, when such low-priced systems accounted for just 7% of computers sold through retailers. BEST WISHES BILL