CII: While PCs at retail boomed from 1994 to 1995, top three vendors gave up market share to newcomers; PC retail sales up 49% year-to-year; Prices also on the upswing.

LA JOLLA, Calif.--(BUSINESS WIRE)--Feb. 26, 1996--According to Computer Intelligence InfoCorp (CII), though overall sales of personal computers (both desktop and portable models) in U.S. retail channels increased 49 percent in the fourth quarter of 1995 over the fourth quarter of 1994, the collective market share of last year's leading vendors Packard Bell, Compaq and Apple saw a significant decline, from 70 percent of PC sales to 56.6 percent of sales.

These findings emerged from CII's StoreBoard Channel Tracking database, which tracks U.S. sales channel performance and trends for microsystems, printers and software. StoreBoard retail channels include Consumer Electronics Stores, PC Superstores and Office Superstores.

Apple Computer registered the largest individual decline in market share in the fourth quarter of 1995 compared to the fourth quarter of 1994, 5.6 percentage points - fully one-third of its 4Q 1994 retail share. Replacing Apple in the number three position in retail was Acer, which is focused on only one of StoreBoard's three retail channels (99 percent of Acer's fourth quarter sales went through Consumer Electronics Stores). Acer accomplished a 12.2 percent market share in 4Q 1995, up from an 8.9 percent market share in 4Q 1994.

Another fast-moving vendor is Hewlett Packard, while not present in the retail channel in 4Q 94, was able to gain a respectable 7.8 percent in 4Q 1995, the highest gain of the major vendors. Other up and coming players in this market are Digital Equipment Corporation and NEC, which in the fourth quarter of 1994 together managed less than 1.5 percent of market share, but in the fourth quarter of 1995 accounted for over 3.9 percent.

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Change in Retail Market Share, 4Q 1994 to 4Q 1995

Vendor      4Q 94 Share      4Q 95 Share   Gain/Loss   Change in Share
                                           in P.P.
Packard Bell   33.4%             27.9%        -5.4          -16.3%
Compaq         19.8%             17.5%        -2.2          -11.2%
Apple          16.8%             11.2%        -5.6          -33.5%
Acer            8.9%             12.2%         3.3           37.1%
IBM             5.4%              5.4%           0           -0.1%
Toshiba         4.6%              6.5%         1.9           41.0%
Hewlett Packard   0%              7.8%         7.8            N/A
Other          11.1%             11.4%         0.3            2.7%

Source: CII StoreBoard Channel Tracking, February 1996

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Year-to-Year Growth in Retail Sales, 4Q 1994 to 4Q 1995

Vendor         Growth Rate
Packard Bell      24%
Compaq            32%
Apple             -1%
Acer             104%
IBM               48%
Toshiba          110%
Hewlett Packard (N/A)
Other             53%
Total             49%

Source: CII StoreBoard Channel Tracking, February 1996

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Compaq showed good growth in the retail channel from 4Q 1994 to 4Q 1995, and held on to second place. Packard Bell, while maintaining the top retail spot, grew more slowly than the PC market as a whole: 24 percent year-to-year growth for Packard Bell, compared to 49 percent growth for the total retail market. In the month of December 1995, Packard Bell's growth over December 1994 was only 4.7 percent, compared to the industry average of 35.1 percent.

"The top three vendors in retail - Packard Bell, Compaq, and Apple - all grew more slowly than the rest of the market," observed Matt Sargent, CII's Industry Analyst for PC Hardware. "These top vendors were well positioned in 1994 and had little competition at that point. But 1995 was a different story, as many other vendors introduced retail-specific models, raising the number of options for consumers and thus the level of competition."

CII has also discovered that average selling prices of PCs appear to be rising after a long period of stability. Since October 1992, the average selling prices of desktops/towers through StoreBoard (all channels) had been quite steady, after the "Price Wars" of July 1992 dropped the baseline prices for PCs 19 percent in four months. Between October 1992 and June 1995, the average price stayed between $1,800 and $2,000. Starting in July 1995, and continuing every month since then, PC prices were up at least 8 percent, compared with 1994 at the same time. For example, September 1995 prices were a full 15 percent higher than in September 1994.

"Some of this rise in prices may be tied directly to Windows 95 - the price increases come at the same time as Win95's release, for which many models need added memory," said Sargent "It may also have something to do with additional multimedia capabilities and the `Pentiums for all' trend. Whatever the case, the fact that PC users are starting to spend more money certainly bears watching. In the retail channel in particular, the change in pricing is dramatic in the September-to-December timeframe."

Computer Intelligence InfoCorp, a Ziff-Davis Publishing Company, is the leading source of fact-based information for the computer and communications industries. CII's extensive research capabilities provide a wide variety of products and services that help computer and communications companies sell and market more effectively. All of the company's products and services are based on proprietary information databases built and maintained by CII specialists. Headquartered in La Jolla, Computer Intelligence InfoCorp has offices in Cambridge, Mass.; Farmington, Conn.; Mountain View, Calif.; and Europe. Samples of CII's extensive market data and research results, timely commentary from industry authorities and previews of upcoming technology events are available on the company's Home Page on the World Wide Web (http://www.compint.com).

CONTACT: Judith Vanderkay or Stacy Karp Mosher

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Mark Fisher

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