PC sales have had a bad year, but sales of peripherals — the removable memory, CD drives, LCD monitors and other new toys computer users increasingly can’t live without — have had a robust year, NPD Intelect found.
The dollar volume of computer product sales through domestic retail outlets grew 3.4 percent to nearly $12.3 billion during the first six months of 2001, led by removable memory and LCD monitors, the top two revenue generating product categories, which grew more than 210 percent and 149 percent, respectively, from the first half of 200 to the first of 2001. Blank CD media grew more than 65 percent and PDA revenue expanded more than 57 percent. Recordable CD drives also increased more than 30 percent from the same period in 2001.
“The depth of the PC decline, which had revenue losses of more than 20 percent year-over-year, overshadows some exciting growth categories in the computer products business,” said Stephen Baker, NPD Intelect’s director of hardware research. “In fact, without the components of the desktop PC bundle (PCs, CRT [Cathode Ray Tube] monitors and ink printers), overall revenue would have been up 20 percent.”
Although peripherals performed well, it was the “core” computer product categories that failed to thrive during the first half of 2001. Revenue share for the four main categories: printers, scanners, CRT monitors and desktop PCs fell from 45.5 percent in 2000 to only 35.5 percent of sales through the first half of 2001.
“These four key categories have approached the sales slowdown in markedly contrasted styles,” Baker said. “While printer and scanner manufacturers have been aggressively reducing prices, desktop PC and CRT monitor vendors have chosen to hold the line on prices. Both of these strategies have proven unsuccessful in generating revenue. While sales have not yet rebounded, manufacturers are looking toward the launch of Windows XP and the coming of the holiday season to boost demand.”
According to preliminary data from Gartner’s Dataquest unit, worldwide PC shipments in the second quarter of 2001 totaled 30.4 million units, a decline of 1.9 percent from the second quarter of 2000. That makes the second quarter of 2001 the first time the worldwide PC market has had a negative growth rate since 1986.
In the United States, the second quarter of 2001 marks the second consecutive quarter of negative growth. The United States saw its PC market decline 6.1 percent in the quarter, Dataquest found. Price pressures intensified in the United States during the quarter as some competitors followed Dell with substantial price reductions. Gateway declared it would beat the lowest price from competitors on comparable PC configurations, while Hewlett-Packard and Compaq lowered prices for their business desktop models.
|Computer Product Sales
First half of 2001 vs. First half of 2000
|Blank CD Media||1.7%||2.7%||65.4%|
|Recordable CD Drives||2.2%||2.8%||30.4%|
|Source: NPD Intelect|