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

To: Night Writer who wrote (35835)	11/4/1998 9:23:00 PM
From: Elwood P. Dowd	Read Replies (1) \| Respond to of 97611

PC Sales to Rise On Consumer Holiday Season Surge PC Sales to Rise on Consumer Holiday Season Surge (Update1) Bloomberg News November 4, 1998, 2:50 p.m. PT PC Sales to Rise on Consumer Holiday Season Surge (Update1) (Adds details on PC dollar sales growth in 8th paragraph.) San Francisco, Nov. 4 (Bloomberg) -- Personal-computer sales are expected to surge during the next few months as consumers flock to stores to buy new machines, many spending more than $1,000 each for extra bells and whistles. More than 10 percent of households are ''very likely'' to buy a new PC this holiday season, based on preliminary results of a survey by researcher MarketMaps. Buyers plan to spend $1,500 on a PC, MarketMaps said, plus as much as $400 on software, printers, scanners and other extras. ''This is going to be a better holiday season than last,'' said analyst Bill Ablondi of MarketMaps. Last year, less than 10 percent of households planned to buy a PC, he said. PC unit shipments are expected to rise 13 percent in the fourth quarter, their biggest gain all year. About a third of all PCs are sold in the final three months of the year. That will be good news for Compaq Computer Corp., International Business Machines Corp., and Hewlett-Packard Co. PC makers are anxious for the wave of buyers, as they spent the first six months of the year getting rid of extra inventory and slashing prices on older models. Even Dell Computer Corp., which has done well amid all the turmoil at rivals because it carries no inventory, is expected to do well because corporate sales will be strong. Cheaper Models Now, new cheaper models are being introduced, inventories have been whittled down and consumers are ready to buy new computers with faster chips and the new Windows 98 operating system from Microsoft Corp. Intel Corp. and Advanced Micro Devices Corp. have both cut microprocessor prices on PCs for consumer buyers, as well as some for corporate machines. That has prompted price cuts by manufacturers like H-P and Dell. Machines that cost less than $1,000 remain popular and are attracting buyers who wouldn't have bought a machine at the higher prices, which is helping expand the market, but keeping on lid on revenue growth. Sales are forecast to rise about 6 percent in the quarter. Still, systems costing more than $1,200 are selling well, analysts said, and that's good news for PC makers, which usually make more money on the more expensive PCs. PC Data Corp., a market research firm in Reston, Virginia, says that the $1,000 price is the ''mode'' in the market, meaning about half of PCs purchased cost less than that and about half cost more. ''This coming holiday season for retailers selling PCs is going to be very good,'' said analyst Martin Goslar of Cahners In- Stat Group. Also helping sales will be strong demand from corporate buyers, which represent about 65 percent of the $180 billion-a- year PC market. Companies, too, are taking advantage of lower prices and updating their systems.