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To: SecularBull who wrote (53162)	7/22/1998 12:51:00 PM
From: Gabriel008	Read Replies (1) \| Respond to of 176387

ALL: interesting article from ZD Market Intelligence re sub $1000 PC impact on repurchase cycles. Article below. To get to article & graphs connect to zdintelligence.com and go to Infobeads section and Goldberg's Insider. Once you've connected to Goldberg's Insider click on Consumer Market in the left margin. A series of articles, including this one dated July 20/98, will pop up by date. Enjoy. Sub $1K PCs Move In Higher Price PCs have been Evicted! Co-authored by Dave Tremblay, Sr. Analyst, PC Software and Hardware When sub-$1,000 desktop PCs started taking-off in US retail channels early in 1997, a lot of us in the industry wondered what their effect would be. Would they would merely cannibalize sales of other, higher-priced PCs, or would they increase PC volumes, either by drawing in new users or by shortening replacement cycles? Well, the numbers are in, and they look good! We've talked about who the Sub $1000 PC buyer is and have highlighted our findings in previous editions of InfoBead Insider, but our latest analysis of this class of PCs shows us that the sub$1Ks are having a significant impact on the buying cycle. Our latest Technology User Profile research from over 8,000 consumer and self-employed PC users shows us that the low-priced purchases were actually causing movement in the market - specifically, additional purchasing. In the home segment, sub-$1Ks replaced younger PCs (about a third of a year younger) in 1997 than they did in 1996. In the self-employed segment, the PCs being replaced with these low-cost PCs were a full year younger. A third of a year might not seem like much, but when home segment PC volumes are exceeding 10 million PCs a year, and when there are over 45 million PCs already installed, even this small difference translates into a lot of extra PCs. Including both the home and self-employed segments, we estimate that between 500,000 and 750,000 "extra" PCs will be sold in 1998 just because of the life cycle difference. And as they say on TV, "but wait, there's more!" We also took a look at future purchase plans for those who bought a PC in 1997. Since they just bought a PC, you'd expect that few of them would be planning to buy another PC in 1998, and that's what we found. Overall, only about 12% of the home or self-employed pc users who bought a PC in 1997 were planning to buy another PC in 1998. The real interesting fact is found when you look not at if they bought in '97 but at how much they spent in 1997. Those who spent under $1,000 are about one-quarter more likely to be planning to buy a PC in 1998 than those who bought a PC in the market's "sweet spot" - between $1,000 and $1,999. (See table.) Even among those who bought a new PC in 1997, those who paid under $1,000 are much more likely to be planning to buy a PC in 1998 than are those who spent $1,000 to $1,999. What's the bottom line? It looks like the sub-$1,000 PCs have not just been cannibalizing sales. They have lead to a shortening of PC lifecycles and an increase in purchase plans. Of course, all this could change as this market continues to evolve, so we'll continue to track this and will report back to you, the Insider reader, as we have new information.