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

To: Loki who wrote (21649)	3/13/1998 1:15:00 AM
From: van wang	Read Replies (1) \| Respond to of 97611

the news get worse....sub 1000 is cannabilizing sales IMO Sharp PC price cuts fail to grab new buyers- study NEW YORK, March 12 (Reuters) - Personal computer makers have slashed prices and introduced a range of lower cost products in an effort to lure new buyers, but so far, consumers don't appear to be taking the bait, a new study shows. While PCs priced below $1,000 continue to be the fastest growing sector of the market, repeat buyers still account for two-thirds of PC purchasers, San Francisco-based research firm Odyssey LLP said in its ''Homefront'' study. The study also noted that more people than ever are using their home PCs to make purchases online. Odyssey said 42 percent of U.S. households now have PCs, compared with 39 percent six months ago, and 37 percent one year ago. Of those buying a home computer in the past six months, only 35 percent were first time buyers, up from 32 percent in the similar period ending January 1997, but down from 49 percent in both January 1996 and January 1995. Over the past year, leading PC makers such as Hewlett-Packard Co (HWP - news) and Compaq Computer Corp. (CPQ - news) have raced to offer ''sub-$1,000'' PCs. ''PC manufacturers and retailers ... were certain that lowering prices would create a stampede of first-time buyers,'' said Nick Donatiello, president of Odyssey, said in a statement. ''(PC makers) thought that it (price cuts) would put a kink in the growth curve, that we were going to see much greater penetration as a result of the reduction in price,'' Donatiello said in an interview. ''It didn't happen.'' Odyssey said its research is based on interviews with 2,500 consumers. It conducts the ''Homefront'' study every six months. Studies have shown that low-cost PCs remain the fastest growing segment of home PC sales market. Research firm Computer Intelligence reported in January that systems priced below $1,000 accounted for 32.2 percent of the desktop units sold within the United States by retail in November 1997, up from a mere 7.2 percent in January 1997. In the same period, personal computers priced above $1,500 dropped to 24.8 percent of the market, from 59.3 percent. Odyssey also said that thirty percent of online households, or about 7 million households, have made a personal purchase from home in the last six months, a 50 percent increase from one year ago. Twenty-three percent of U.S. households are now online, up from 17 percent a year ago, the study showed. ''1997 was the year that millions of Americans tried buying something on the Internet and most realized that nothing bad happened -- their credit card wasn't stolen, their merchandise showed up and it was pretty easy, so they went back for more,'' said Donatiello.