Printer Friendly

MARKET INTELLIGENCE: DISTRIBUTORS, SI/VARS GAIN IN FAST-CHANGING PC/WORKSTATION MARKETS

 MOUNTAIN VIEW, Calif., Feb. 12 /PRNewswire/ -- As microcomputer markets mature and the PC is commoditized, dramatically intensified competition and plummeting prices and margins have shifted the market to volume-oriented strategies. Microcomputer system distribution will shift even further, as these trends continue during the 1990s, toward indirect channels like distributors and new breeds of retailers like superstores and mass merchandisers, says a new study just released by Market Intelligence.
 At the same time, systems integrators and value-added resellers will become increasingly important to distribution of higher-end products like commercial workstations.
 Direct sales to end-users will decline as a share of PC and commercial workstation market revenues from 21 percent in 1992 to only 16 percent by 1998, while the share held by distributors will rise from 9 to 15 and that of systems integrators and value-added resellers from 12 to 20 percent, says the report, "Microcomputer System Distribution Analysis."
 The retail channel, while remaining the largest distribution vehicle, will gradually decline as a portion of the whole as mass merchandisers and superstores gain share while once-dominant dealers lose even more. Retail sales overall will see less than a 5 percent compound annual growth rate while the much smaller distributor channel grows at a nearly 20 percent compound rate.
 Distributors will grow most rapidly of all channels, with SI/VARs close behind. Distributor revenues from sales of PCs and commercial workstations will grow from less than $4 billion in 1991 to a projected $12.8 billion in 1998, reflecting the increasing market emphasis on volume distribution. Growth in sectors of other channels like retail will add to distributor volume as that channel is used for increasingly multi-tiered distribution.
 SI/VAR growth, particularly for newer products, will also reflect the increased market-wide importance of multi-vendor solutions and open systems. Another response to these factors will be closer alliances between vendors and channel participants.
 Total U.S. microcomputer system markets are projected to grow from $48 billion in 1992 to nearly $84 billion by 1998, paced by commercial workstations, sublaptop and notebook computers.
 Desktops and portable laptops will decline as a share of the overall microcomputer system market, while sublaptops and commercial workstations increase their shares during the 1990s. Desktops are projected to dip from 81 percent of total U.S. microcomputer system revenues in 1992 to under 71 by 1998 -- reflecting dramatic price drops and market maturity -- while sublaptops rise from seven to 13 percent during the same period and commercial workstations increase in share from four to nine percent of revenues. Sublaptops are growing rapidly now but their growth will slow during the decade, while commercial workstation growth will actually accelerate.
 SI/VARs are already the largest channel for commercial workstations and their share of that market will increase further, from 41 percent in 1992 to 52 percent in 1998. Direct sales of such products will decline from 36 percent in 1992 to 24 in 1998 and OEM sales will also drop. Retail sales of commercial workstations, unheard of in the recent past, will form a projected 11 percent of that dynamic market by 1998.
 The retail channel will retain its strong position in the sublaptop market -- 43 percent of revenues in 1992 -- while direct sales decline from 44 percent in 1992 to 36 percent by 1998. Both distributor and SI/VAR share, while modest, will increase.
 There will be strong shifts within as well as between the major channels. Direct sales will increasingly move from the field to the mail and the phones.
 The OEM channel will grow significantly, particularly for sublaptop and notebook computers, though it will remain less than four percent of the overall market. Shifting economies of scale and falling profit margins are contributing to a gradually increasing industry willingness to use this sales channel.
 Market Intelligence is an international high-technology research firm specializing in microcomputing and information technologies. All Market Intelligence reports are based on extensive interviews with marketing and technical experts from selected companies in each market segment. Primary research is validated by thorough analysis of available secondary research. Since 1982, Market Intelligence has emerged as one of the leading publishers of high-technology market research reports.
 Total Microcomputer Systems Market:
 Revenue Forecasts (U.S.), 1988-1998
 Revenue
 Revenues Growth Rate
 Year ($ Million) (Percent)
 1988 32,001.4 --
 1989 37,503.8 17.2
 1990 42,983.1 14.6
 1991 48,071.4 11.8
 1992 52,893.3 10.0
 1993 58,101.5 9.8
 1994 63,496.0 9.3
 1995 68,759.4 8.3
 1996 73,858.8 7.4
 1997 78,883.8 6.8
 1998 83,678.2 6.1
 Compound Annual Growth Rate (1991-1998): 8.2 percent
 Note: All figures are rounded.
 Total Microcomputer Systems Market:
 Percent of Revenues by Distribution Channel (U.S.),
 1988-1998
 Direct OEM Distributor SI/VAR Retail
 Year (pct.) (pct.) (pct.) (pct.) (pct.)
 1988 24.2 2.8 5.3 8.3 59.3
 1989 23.4 2.8 5.7 9.1 59.1
 1990 22.5 2.9 6.6 10.0 58.0
 1991 21.7 2.9 7.7 10.7 57.0
 1992 21.1 3.0 8.9 11.6 55.4
 1993 20.2 3.1 10.2 12.6 53.9
 1994 19.3 3.1 11.4 13.7 52.4
 1995 18.5 3.2 12.5 15.0 50.8
 1996 17.7 3.3 13.5 16.5 49.0
 1997 16.8 3.4 14.5 18.1 47.2
 1998 15.8 3.4 15.4 19.8 45.6
 Key: OEM: Original Equipment Manufacturer
 VAR/SI: Value-added Reseller/Systems Integrator
 Note: All figures are rounded.
 Source: Market Intelligence
 -0- 2/12/93
 /CONTACT: Amy Arnell, Market Intelligence, 415-961-9000, or fax, 415-961-5042/


CO: Market Intelligence ST: California IN: CPR SU: ECO

PK-TM -- SJ003 -- 6168 02/12/93 12:52 EST
COPYRIGHT 1993 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Feb 12, 1993
Words:979
Previous Article:SOMATIX REPORTS SECOND QUARTER RESULTS
Next Article:CHICK-FIL-A RESTAURANTS AWARD $920,000 IN SCHOLARSHIPS NATIONALLY IN 1992
Topics:


Related Articles
COMPAQ ANNOUNCES COMPREHENSIVE PROGRAM FOR VALUE ADDED RESELLERS; AUTHORIZES MERISEL, TECH DATA AS FIRST-EVER DISTRIBUTORS
MERISEL SIGNS LANDMARK AGREEMENT TO DISTRIBUTE COMPLETE COMPAQ PRODUCT LINE INTO VALUE-ADDED RESELLER CHANNEL
NEW PS/2 AND PS/1 DISTRIBUTION PROGRAMS FOR VARS PROVIDE GREATER FLEXIBILITY AND PRODUCT AVAILABILITY (Product Announcement)
INGRAM MICRO TO DISTRIBUTE HEWLETT PACKARD'S SERIES 700 WORKSTATIONS AND X STATIONS
NEW PS/1 PROS BROADEN IBM'S PRODUCT DISTRIBUTION; IBM INTRODUCES NEW SPECIALLY-DESIGNED PS/1 386SXs FOR VARS
WANG SIGNS UP DICKENS DATA SYSTEMS AND ROBEC, INC. TO DISTRIBUTE RISC-BASED IMAGE SOFTWARE
PATRICK SULLIVAN JOINS DIGITAL AS VICE PRESIDENT OF MASS MERCHANDISING
DIGITAL FIRES WINDOWS NT WORKSTATION SALVO WITH PERSONAL WORKSTATION PROGRAM
DIGITAL SIGNS MULTIMILLION DOLLAR AGREEMENT WITH microCAD
IBM AND PIONEER-STANDARD ELECTRONICS JOIN FORCES FOR ENHANCED DISTRIBUTION TO VARS THROUGHOUT THE U.S.

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters