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To: JRI who wrote (108266)	3/8/1999 3:38:00 PM
From: Gabriel008	Respond to of 176387

Here's another research article I picked up from ZD, this time on the US RETAIL sub $1000 desktop market. Sub $1,000 Desktop Reach over 60% of Market Written by Matt Sargent, Senior Industry Analyst As an update to past stories on the sub $1,000 market InfoBeads felt that it was important to inform the industry that for the first time ever, sub $1,000 PCs exceeded 60% of US retail desktop sales. The tiny market that could, which started with a minuscule 7.2% share of US retail desktops in January 1997, has started 1999 with a bang with January sales grabbing 60.5% of the US retail desktop market. This dramatic growth, and now dominant position within retail, illustrates very clearly that the growth in retail exists almost entirely at the low end. The major vendors within the retail desktop market have all come to realize the importance of low cost PCs, and any vendor that wants to have a presence in retail, must be a significant player at the low end. The data below clearly shows how sub $1,000s have started from virtually nothing in January of 1997, to the majority of the market in January of 1999. Source: StoreBoard A good question to ask is that even if it is true the majority of units are going to the sub $1,000 market, how much of the revenue with retail desktops is coming from sub $1,000s. Despite sub $1,000s low (and ever decreasing) price points, this category made up 47% of the dollars earned in retail desktops in January. So, if you decide to ignore low cost PCs, you might as well show yourself to the exit door of the retail space. On the other hand, if you want to play in retail, you should maintain an interest in who the major players are, what the low cost buyers look like, (in a previous story, Sub $1,000 PC Demographics – Who is the consumer?) and what part of the low cost market is growing the fastest. Chart #2 below answers the last point and shows that the lowest part, of the low end is the fastest growing segment of the US retail desktop market. Source: StoreBoard Sub $600 PCs have been the newest push within the retail desktop market over the last few months and have risen from 0.7% of that market in September to 19% in January. Interestingly enough sub $600 PCs were actually the only price class that have expanded market share since September as even the $600-$999 segment has shrunk, showing the strength of systems priced under $600. Clearly customers are opting for the lowest that PC vendors can provide and one may wonder how far we are away from the $800 PC representing the high end.