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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: Clarksterh who wrote (17403)	3/9/1998 10:36:00 AM
From: David Rosenthal	Read Replies (1) \| Respond to of 70976

Clark, I agree that 1) is the most serious and you know it has to happen at some point. One question I have about the January unit sales you mentioned is what percentage of unit sales is consumer < $1000 boxes versus normal business purchases/upgrades and are the business upgrades flat? If the increase in sales are in the low-end boxes then you have to consider that this could just be pent-up demand and is not sustainable in the long run. The introduction of these well-configured low-end boxes has probably tapped two consumer markets: 1) those that have been waiting to purchase/upgrade for a long time but couldn't afford it and 2) secondary computer purchases. I think 1) is probably where most of this is coming from and I do not see demand from this segment as sustainable in the long run. Once this group has been satisfied, low-end demand will slow and growth will have to come from elsewhere. I think the fact that DELL is doing well indicates that business upgrade demand is still strong, however, what do the numbers show? Dave