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Technology Stocks : Disk Drive Sector Discussion Forum -- Ignore unavailable to you. Want to Upgrade?

To: Tom Simpson who wrote (3604)	6/10/1998 1:39:00 PM
From: Mark Oliver	Respond to of 9256

International Data Corp (IDC), has once again reduced their estimate for global PC unit volumes. In the second quarter PC units are only expected to grow by 9 percent. This compares with the 11 percent growth rate in the first quarter and 15 percent in '97. In IDC's press release they presented the following table of the top five PC vendors: TOP 5 VENDORS, WORLDWIDE PC SHIPMENTS, Q1 1998 International Data Corp. (Thousands of Units) Q198 Vendor Q198 Q197 Market Market Growth Rank Ship- Ship- Share Share 98/97 ments ments 1 Compaq 2,749 2,000 13.5% 10.8% 37% 2 IBM 1,672 1,607 8.2% 8.7% 4% 3 Dell 1,605 982 7.9% 5.3% 63% 4 Hewlett 1,365 822 6.7% 4.4% 66% Packard 5 Packard 925 967 4.5% 5.2% -4% Bell NEC Others 12,115 12,096 59.3% 65.5% 0.2% All 20,430 18,474 100.0% 100.0% 11% -------------------- TOP 5 VENDORS, U.S. PC SHIPMENTS, Q1 1998 (Thousands of Units) Q198 Vendor Q198 Q197 Market Market Growth Rank Ship- Ship- Share Share 98/97 ments ments 1 Compaq 1,378 890 17.3% 12.8% 55% 2 Dell 940 573 11.8% 8.2% 64% 3 Gateway 654 466 8.2% 6.7% 40% 4 Packard 629 700 7.9% 10.1% -10% Bell -NEC 5 IBM 625 559 7.9% 8.0% 12% Others 3,731 3,762 46.9% 54.1% -0.8% All 7,958 6,952 100.0% 100.0% 15% I wonder if they include DEC sales with Compaq yet? Also note the other catagory. Sometimes you get the feeling that if Compaq's sales or Dell's sales go up it is at the expense of some other big player, but in reality the numbers in the other catagory indicates the vast size of mom and pop shops that are still assembling computers. Going back to the favorite word, disintermediation, the direct marketing model and commoditization of PC's is hurting small players ability to add value, or undercut prices with marginal components. Makes the multiples on Dell more understandable. Also, I'm reading that Compaq is going to a Gateway like program of offering a bundled computer and internet service for a monthly fee. In this case, they offer the internet service with either AOL, or GTE. It's a powerful new concept which will again ring a change. In my imagination, I see people getting realitively good computers with middle to trailing edge components. These machines will be contracted for 2 years. Currently with sub $1000 pc's, I had figured at some point there would be a significant upgrade of some components such as hard drives as people quickly realize their limits. Now, you'll see people who have a leased machine and no desire, or perhaps right, to do any systems upgrades. In 2 years, bandwidth and computers will have changed a lot. These users may be getting sucked into a very bad deal. This will continue the issue of churns for Internet Service, but will add the cost of returned hardware. How will this play out? Is Compaq taking a big risk, or is it an undeniable shift? Anybody wonder why AOL shouldn't just buy a PC vendor like Micron and sell or rent their own PC's much like the phone company? I'm also wondering about setting up networks in the house. Now, I've got a conflict of who gets to use the internet. If I have 2 or 3 PC's and they all want to be online, how do I do it without adding another phone line and ISP account? I need a server in the home. Regards, Mark PS Sorry. Much of this is off topic to Storage. I'll copy it so PC RoundTable.