Yogi, GM, all...
>>>
only 6 percent of PCs sold in June were priced higher than $2,000, according to ZD Market
Intelligence data.
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I'm not sure what the 6% refers to (possibly US retail sales).
But it seems that the low-end PC is still growing at the expense of the higher-cost models.
And DELL is still humming along, and it has, so far, stayed out of the low-cost PC segment.
Separately, if I ever make any money in this ^%*&$ market, I might pick up one of these new IBM Cobras.
Regards,
Larry
dailynews.yahoo.com
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Thursday August 20 1:58 PM EDT
IBM to unveil new high-performance consumer PC
By Eric Auchard
NEW YORK (Reuters) - IBM aims to upset the sleepy conformity of the consumer personal
computer industry next week when it unveils a screaming-fast machine designed to stir excitement
among power-hungry PC users, industry sources said.
The sleek, black PC, code-named ''Cobra,'' will run on the new Pentium II 450 megahertz chip that
Intel Corp. (INTC - news) is set to introduce Monday, and will come with 128 megabytes of
computer memory and a 16.8 gigabyte hard disk.
The new machine will carry a list price of slightly more than $2,000 for a full-power machine that
promises not to be quickly outdated, the sources said. The monitor costs extra.
A 15-inch flat panel display will be sold alongside the PC -- International Business Machine Corp.'s
first such advanced monitor to retail for less than $1,000. The total cost of the Cobra, with monitor,
will be just more than $3,000, they said.
IBM and Intel declined to comment on upcoming product announcements.
With Cobra, IBM is addressing a market largely ignored in the stampede by consumers to buy PCs
for less than $1,000. These machines typically use standard components with little differentiation
between products from rival vendors.
''This is clearly IBM's attempt to drive up market,'' industry analyst Aaron Goldberg at ZD Market
Intelligence in La Jolla, Calif., said of IBM's plan. ''What IBM is trying to do is blow the socks off
rivals with better configurations.''
IBM is targeting power users -- home office workers, heavy-duty video game players and graphic
designers -- who buy PCs more often, add a lot of peripherals and generate better profit margins
than cost-conscious PC users.
A hit at the high-end would add momentum to IBM's consumer business, which more than doubled
its retail market share to 19 percent since February, thanks to success in selling sub-$1,000 PCs and
competitive missteps by rivals, Goldberg said.
Stella Kelly, a PC industry analyst with Market Metrix in Los Gatos, Calif., agreed, saying that July
retail data shows that ''IBM is doing very well at the low end but it is also doing very well at the high
end of the consumer market.'' Market Metrix found that nearly two-thirds of IBM PCs sold through
retail in July were for PCs that cost less than $1,000 -- at street prices as low as $707.
But another 28 percent of IBM's total were PCs priced higher than $2,000. A sales chart of IBM's
consumer business has a dumbbell-shaped appearance with strength at the low-end and high-end of
the market in terms of prices, she said.
The ''Cobra'' will serve to fill out the high-end of IBM's consumer desktop PC line. Currently, the
top of the line Aptiva ''S'' series machine sells for $2,800, monitor included.
With the Cobra, IBM appears to be betting that a market for state-of-the-art, BMW-class consumer
machines can thrive. It is a market that has virtually disappeared in the flight to cheaper computers --
only 6 percent of PCs sold in June were priced higher than $2,000, according to ZD Market
Intelligence data.
''There's a halo effect that exists,'' Goldberg said of IBM's bid to improve its reputation for
innovation across its product line-up. ''If you get really great, really cool products at the high-end of
the retail market it does help low-end sales.'' The new computer, which comes with top-of-the-line
Infinity speakers and a bundle of advanced software, will be available worldwide starting Sept. 15,
the sources said.
Customers can choose to upgrade the Cobra to run an eye-popping 384 megabytes of computer
memory.
The machine marks the return of a strategy IBM used with success earlier in the 1990s on its
innovative ThinkPad line of notebook computers -- a brand for mobile customers who wanted the
best of everything and were willing to pay a little extra.
Copyright c 1998 Reuters Limited.
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dailynews.yahoo.com
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Thursday August 20 11:12 AM ET
PC sales, stocks rebound from slump
By CNBC's Jerry Cobb
Personal computer makers are hitting on all cylinders - or at least on more cylinders than they have
been lately, CNBC's Jerry Cobb reports. And that's having an impact on stock prices as well as
store traffic. The Nasdaq market has been rallying this week on the strength of good news on the PC
front. But the question remains in many investors minds whether or not the rally is sustainable.
A stronger-than-expected earnings report from Dell Computer is just the latest evidence of
improvement in the personal computer business. New products, attractive prices and slimmer
inventories are helping computer makers - and investors - regain some of the ground they lost earlier
this year.
Computer retailers have been selling out of the new Apple I-Mac, thanks to record levels of interest
from consumers like Lewis Werner.
"It looks good," he said. "It seems to work well. It hasn't crashed yet, and you don't have to install
Windows on it."
Analysts say the new machine is just one of many reasons consumers are out computer shopping
again.
"We're looking at a replacement cycle, a natural replacement cycle combined with some new very
attractive low-end systems and a Pentium II cycle," said Scott Miller a PC industry analyst at
Dataquest. "So everything is really coming together to drive that."
The excess inventories that plagued the industry during the first half of the year have largely
disappeared. And as consumers flock to PC retailers, investors have been flocking to PC stocks -
pushing the Goldman Sachs computer hardware index up to its highest levels in a year.
"The good news is that I don't think it's over," said Kurtis King at NationsBanc Montgomery
Securities. "I think that with demand and supply more in equilibrium, the industry will continue to see
benefits over the next couple quarters, such that the best-positioned PC companies - who in my view
are Compaq and Dell - should continue to outperform the market."
Alex Henderson, Director of Technology Research at Prudential says months of selling of PC stocks
by investors is helping fuel the current rally.
"We've got a rebound off of well-oversold positions for stocks that have been battered badly by the
marketplace over the past several months," he said.
Dell's success helped to buoy some other computer manufacturers Wednesday: IBM and Gateway
both saw their fair share of market action.
But the good fortune PC makers are enjoying isn't helping the semiconductor business - where prices
for key computer chips remain flat at best.
"As far as chips are concerned," said Chris Chaney at A.G. Edwards, "there's still a lot of
overcapacity for memory chips and a lot of other types of chips as well. So there's still too much
supply out there."
Wednesday brought more negative news from the semiconductor industry. LSI Logic warned it
would have lower-than-expected third quarter earning and Analog Devices' earnings fell short of
Wall Street's expectations.
"It looks like we've had a bit of a false start in the semiconductor group in the last few weeks," said
Brendan McGovern at S&P Equity Group. "We've seen some more bad news out of the group on
the earnings front - namely from LSI Logic and Analog Devices not performing as well as expected.
And we believe there could be a few more rough quarters ahead before any sustained upturn begins."
Asia's problems are also keeping a lid on chip prices - another plus for the PC makers. But longer
term, the PC industry needs to find new sources of growth.
"The imperative for PC industry participants in the coming years is to shorten the replacement cycle,"
said Miller. "There's a lot of uncertainty about how we get more corporations to buy more PCs more
quickly. That needs to be solved fairly quickly."
There's also more consolidation in store for the PC business. Dataquest estimates that 5 computer
vendors will account for 50 percent of worldwide shipments by the end of the year 2000.
Copyright c 1996-98 MSNBC.
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