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To: Diamond Jim who wrote (70416)	1/1/1999 12:44:00 AM
From: Diamond Jim	Respond to of 186894

News December 31, 23:52 Eastern Time Dec. 31, 1998 (Computer Retail Week - CMP via COMTEX) -- Waltham, Mass. - The 1998 holiday season tipped the scales in favor of sub-$1,000 PCs, as the category comprised the majority of sales for most retailers. Intel today will pay further homage to the trend by announcing two new desktop Celeron chips-a 366MHz and an unexpected 400MHz version-in a clear recognition of the undeniable growth of "basic" PCs. (See story, page 2.) But market watchers indicated that the low-end frenzy suffered some missteps during the holidays. There were some returns and consumer frustration regarding rebates, which PC makers and vendors used in unprecedented numbers to create the appearance of even-lower prices, retailers and analysts said. "This year is probably the most predominant use of rebates we've ever seen," said Cameron Duncan, an analyst for ARS in Irving, Texas. "I would imagine there's a lot of consumer frustration." Four of the top five PC SKUs in November sold for less than $1,000, but the real growth was in the sub-$800 category, according to PC Data, Reston, Va. In November, that grouping composed 37 percent of sales, up from 4 percent in November 1997, PC Data reported. This percentage does not include advertised after-rebate prices. Although solid sales figures were unavailable at press time, anecdotal evidence confirms sales of sub-$1,000 and especially sub-$800 systems fueled strong holiday sales. American Appliance has been selling Packard Bell PCs for $399 and $499, after $200 in rebates are deducted, but is finding few customers willing to buy them. "We are doing more with computers priced between $700 and $900, after rebate, than with those priced less than $700. I think people are being frightened off. They are saying, 'What am I getting for my $400?'" Steven Hassall, computer buyer for American, said In a briefing with analysts in mid-December, Best Buy said its sales of sub-$1,000 units composed the bulk of its PC sales. Vendor Emachines, which offers a $499 SKU and a $399 SKU (with rebates), said the company experienced a strong entry into the market. "Our feedback from retailers has been fabulous," said Stephen Dukker, president and CEO of Emachines. Retailers reported that, although the profit on the products are thin, margin-fattening add-on sales are common. Jeff Kirschblum, vice president of marketing at New World Computers Direct and Nationwide Computer & Electronics, both based in Edison, N.J., said the Emachines units are strong sellers and lend themselves to numerous add-on sales. "When you've got a USB port on the front [as Emachines systems do], it makes a spiel about USB peripherals that much easier," he said. Customers at a Micro Center store in Cambridge, Mass., who expressed interest in an Emachines unit were strongly encouraged to spend an extra $100 to upgrade the machine's RAM. However, some retailers reported that returns among sub-$600 systems were higher than normal. A merchandise manager for a regional retailer in the Midwest said he no longer offers low-end systems from lesser-known vendors because of quality issues. Since Packard Bell NEC pulled out of most regional chains, he said he has had trouble getting any first-tier PCs priced at $599 or lower. Dukker said Emachines boasts a low return rate of 3 percent.

To: Diamond Jim who wrote (70416)	1/1/1999 12:47:00 AM
From: Diamond Jim	Read Replies (1) \| Respond to of 186894

News January 1, 00:20 Eastern Time Dec. 31, 1998 (InformationWeek - CMP via COMTEX) -- As 1999 begins, many companies are already fretting over how it might end. But between now and Dec. 31, when year 2000 compliance efforts will be put to the test, technology vendors will deliver a host of products that could have a more immediate impact on business computing. The lineup includes Microsoft's Office 2000 applications and Windows 2000 operating system, improved integration software for enterprise applications, more powerful Intel-based servers, "intelligent" management software, and personalization technology for Web sites. And some users are eager for upgrades. There's pent-up demand for Microsoft's Office 2000 desktop suite, due early in the second quarter. And Windows 2000, which Microsoft hopes to ship midyear, has created its own momentum. Howard Jones, CIO at Snapper Inc., a manufacturer of lawn mowers and tractors in McDonough, Ga., wants to move to the new products as soon as they're available. Jones says Snapper can benefit from Office 2000's improved links to the Web and Windows 2000's Active Directory. With enterprise resource planning software widely implemented, there's a growing need to integrate disparate systems. Jorge Taborga, CIO of Bay Networks Inc., is in the market for products to connect Bay's SAP applications with the Baan applications of Nortel Networks Inc., which acquired Bay last August. "When you have a large enterprise, you're dealing with ERP-to-ERP connections," Taborga says. Bay uses CrossWorlds Software Inc.'s integration tools; this quarter, CrossWorlds will introduce CrossWorlds Enterprise, software for integrating core processes such as finance, human resources, and purchasing. Other vendors are upgrading their integration systems as well. In February, Vitria Technology Inc. will unveil an enhanced connector for SAP that provides access to all of SAP's application interfaces. In the first half, Active Software Inc. will release an adapter to extend SAP's Business Workflow to non-SAP applications, as well as adapters for Baan, PeopleSoft 7.5, Siebel 99, and Vantive 8. Oberon Software will release an adapter in the first quarter that ties Siebel 99 into SAP and J.D. Edwards applications, among others. The demand for increased computing power will be addressed as server vendors deliver Intel-based systems that push performance thresholds. By February, several vendors will ship systems with four 450-MHz Pentium II Xeon processors and 2 Mbytes of cache. Today's top-of-the-line Intel servers come with 400-MHz Xeon chips and 1 Mbyte of cache. The newer Xeon will provide a throughput gain of up to 15%; the extra cache will add even more, analysts say. By midyear, 500-MHz Xeon systems are expected. More With Less Several developments could lower the cost of computing or let IT departments do more with less. PC prices, for instance, will keep falling. In 1998, the average price of a PC dropped from $2,200 to $1, 800; this year it will fall to just over $1,200, according to Giga Information Group.