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Technology Stocks : Gateway (GTW) -- Ignore unavailable to you. Want to Upgrade?

To: Wayners who wrote (5985)	6/15/1998 1:01:00 AM
From: Wowzer	Read Replies (2) \| Respond to of 8002

from the WSJ: Apple Computer Falls Behind Gateway And H-P in Customer-Loyalty Survey By JIM CARLTON Staff Reporter of THE WALL STREET JOURNAL Apple Computer Inc. tumbled from its longtime position as the personal-computer industry's leader in customer loyalty, reflecting the computer maker's problems in the consumer market. Apple's rate in getting customers to repurchase its computers dropped to 71% in 1997 from 81% a year earlier, according to an annual customer-loyalty survey by ZD Market Intelligence, a market research firm in La Jolla, Calif. At the same time, mail-order vendor Gateway Inc. moved into first place among top vendors, by increasing its repurchase rate to 75% from 72% a year earlier. Analysts say Gateway's rise is in part due to that company's popularity among customers wishing to configure computers themselves. Coming in second, just ahead of Apple, was Hewlett-Packard Co., whose repurchase rate jumped to 72% from 58% a year earlier. ZD Market analysts said H-P benefited from the strong growth of its Pavilion consumer brand. Apple's fall in the loyalty index is largely because of the company's failure to provide a competitive offering in the explosively growing market for personal computers priced under $1,000, analysts say. Indeed, it was primarily in the consumer market that Apple's repurchase rate fell. According to the ZD Market survey of 11,900 U.S. PC customers, Apple's repurchase rate fell by one-third among consumers over the past year while its other market segments, including corporations, remained roughly the same. "You can point to their lack of a viable entry in the sub-$1,000 category," said Dave Tremblay, a ZD Market senior industry analyst. Apple officials acknowledge they lost ground in the consumer market last year, but hope to remedy that this year with a new product strategy. "We admit pretty openly that we didn't even focus on the home last year," said Phil Schiller, the company's vice president, world-wide marketing. "What we made for the home was not something to be proud of." Apple's interim chief executive officer, Steve Jobs, recently unveiled a new model called the iMac that is aimed at restoring the company's sales among consumers. The machine, featuring a novel design, is to be priced at $1,299, including the monitor, when it is launched later this year. However, many analysts question how popular the iMac will prove among buyers, because it lacks key features such as a floppy disk drive and upgraded modem. "I don't know that it will resurrect them," Mr. Tremblay said. Apple has stabilized its falling share of the PC market, at about 4% compared with about 10% five years ago. Analysts say the company's new strategy of focusing on its core markets should keep it profitable for at least a few more quarters, while it taps pent-up demand among its customers with upgraded products. In other findings from the ZD Market survey, Dell Computer Corp.'s repurchase rate jumped to 69% from 58% a year earlier, Compaq Computer Corp.'s rate stayed about the same at 60%, and Packard Bell NEC Inc.'s rate plunged to 33% from 46%. Analysts said Packard Bell suffered from lingering consumer perceptions that its quality and service lags behind the competition. Even though the Sacramento, Calif., computer maker has invested heavily in recent years to address those issues, analysts say a stigma persists among some buyers. "In the past, people learned on a Packard Bell, and then they moved on," Mr. Tremblay said.