To all thread heads, my spin on the following article is that it is good long term for the semi industry because demand elasticity is biginning to kick in! This is increasing household penetration broadening the overall size of the PC market. However, the bad news is that these purchases are probably sub $1,000 PC's with lower semi content per unit.
In closing, I saw a $800 clone in a major retailer over Christmas with a 200MHX chip (non-intel) 24X CDROM; 16 Meg DRAM; 2 GiG hard drive; 15" color monitor and 56K modem! WOW! I'm almost certain that demand for these types of PC's is going to take off during 1998. Thats the good news! The bad news is that only the most seasoned OEM box makers can make money at these price points.
************************************************************************
Twas The Season For Buying A PC
( 1/05/98; 6:13 p.m. EST)
By Aaron Ricadela, Computer Retail Week
Consumers closed 1997 with a flurry of holiday PC purchases, lifting sales which had sagged through Thanksgiving weekend and only modestly improved during the first half of December.
Home computer purchasing shot up to its highest level since late September during the week ended Dec. 19, and almost equalled that intensity the following week, according to the most recent weekly surveys of PC demand conducted on behalf of the Consumer Electronics Manufacturers Association and Computer Retail Week. PC purchasing for the week ended Dec. 19 soared, with 0.98 percent of 2,443 households reporting they'd bought a computer in the past 30 days; during the prior week, the purchasing level was 0.61 percent. And for the week ended Dec. 26, purchasing remained at a lofty 0.93 percent of 2,466 households. The telephone surveys were conducted by The Verity Group, Fullerton, Calif.
In a sample of 19,565 households, the purchasing level was 0.62 percent during the eight weeks ended Dec. 26. Average purchasing for the 45 weeks of the survey, which began the week ended Feb. 14, has been 0.76 percent.
The number of first-time buyers continued to increase steadily in December, accounting for 41.67 percent of home computer purchases during the week ended Dec. 19 and for 43.48 percent the following week. For the eight weeks ended Dec. 26, first-time buyers accounted for 48.67 percent of purchasing, compared with a 45-week average of 36.69 percent. Among repeat buyers, 23.31 percent of households surveyed during the eight weeks ended Dec. 26 reported buying a replacement computer, compared with a 45-week average of 29.78 percent. Households describing an additional PC purchase accounted for 22.47 percent of demand during the final eight weeks of the year, compared with a 45-week average of 28.48 percent.
One retail executive, speaking on the condition of anonymity, said PC sales recovered across the board during the last two weeks in December and that strong demand has continued into the new year. This followed a sluggish November, especially for high-end systems, he said. "We've conditioned our consumers so much that they can afford to wait for deals," said the executive.
Price-slashing to clear inventory in anticipation of vendors' new models fueled strong sales at the close of the year and during the first days of January, he said.
According to the survey, the number of households planning to purchase home computers dipped for the week ended Dec. 19, with 1.39 percent of households reporting they were likely to buy a PC in the next six months. Plans to buy rebounded the following week, to 1.58 percent, lifting the eight-week moving average to 1.49 percent. The 45-week average was 1.74 percent. The number of households planning to purchase systems decreased throughout the fall.
Household PC penetration held at 42 percent during the final two weeks of 1997, and the eight-week moving average for the period ended Dec. 26 was 42.5 percent. For the 31 weeks CEMA and CRW have tracked the statistic, penetration has been 41.26 percent.
In the consumer electronics sector, color TV and camcorder purchasing rose during the two-week period before Christmas, while VCR purchasing cooled off slightly.
Households reporting a color TV purchase in the past 30 days increased to 1.64 percent for the week ended Dec. 19, but fell slightly to 1.54 percent the following week. Average purchasing for the eight weeks ending Dec. 26 was 1.25 percent, compared with 1.19 percent over the 45 weeks of the survey. Households that said they were very likely to buy a color TV in the next six months averaged 1.73 percent during the eight weeks ended Dec. 26, compared with 1.74 percent over 45 weeks.
Camcorder purchasing held at 0.33 percent for the week ended Dec. 19 and increased to 0.41 percent the following week. The eight-week average purchasing level of 0.25 percent exceeded the 45-week average of 0.19 percent. Plans to buy over the final eight weeks of the survey were virtually unchanged from the 45-week average, at 0.75 percent.
VCR purchasing slowed down, however, to 0.94 percent and 0.93 percent, respectively, during the last two weeks of 1997. But purchasing over the last eight weeks of the year stood at 2.35 percent, compared with a 45-week average purchasing level of 0.96 percent. Plans to buy fell during the two weeks ended Dec. 26, though the eight-week average exceeded the 45-week level. |
