Notebook sales lift holiday retail PC figures

Plunging prices on notebooks entice consumers into buying over the holiday retail season, driving PC sales growth upward compared with the same period last year.

John G. Spooner Staff Writer, CNET News.com
John Spooner
covers the PC market, chips and automotive technology.
John G. Spooner
2 min read
Here's a surprise for the computer business: Holiday 2001 PC sales at retail were up slightly compared with 2000.

Despite the talk of recession, layoffs, and other gloom and doom, between Thanksgiving and Christmas retail saw large year-over-year sales increases in notebooks that offset a smaller drop in desktop PC sales, according to preliminary numbers from NPD Intelect. The result was a slight gain in PC unit sales at retail compared with last year.

NPD Intelect, which tracks retail sales, also said preliminary figures show that overall revenue for computer products, including PCs, peripherals and consumables such as ink cartridges for printers, were flat or were about the same as 2000's.

"Considering how poorly everything was going coming into the season, I think that's something we should be very encouraged by," NPD analyst Stephen Baker said.

Notebook sales--spurred by double-digit price declines from 2000--saved Christmas.

Baker said notebook sales were "through the roof," showing high double-digit unit gains year over year, while desktop PC sales were down, but less than 10 percent.

For comparison, notebook sales were down 9 percent year over year in October, while desktop sales were down 30 percent. Sales bounced back slightly in late November, during the Thanksgiving week, with notebooks up 5 percent year over year and desktops down 10 percent.

"That's a really nice movement," Baker said. But "I don't think that says a ton for the first half of the year." Instead, he said, "I think it's a question as to whether that will mean decent sales going into the first quarter."

Things could change in the first quarter. Strong holiday promotions, which offered rebates on most PCs, helped sales, Baker said. Those sales could evaporate over the first quarter.

"I think it helped to be promotional," Baker said, "although one of the driving forces of people buying continues to be the value you get for what you spend. What you get for $800 in a desktop is pretty remarkable compared to a couple years ago."

Many $750 PCs were fitted with a 1.2GHz processor, up to 512MB of RAM and at least a CD-rewritable drive. Two years ago, $2,000 to $3,000 bought only an 800MHz processor, 128MB of RAM and a DVD-ROM drive. But this past season's configurations could change, decreasing the size of things like memory allotments, if component prices go up by large amounts.

Caveats aside though, "You've got to characterize it as a pretty good Christmas, considering...what it could have been," Baker said.

Meanwhile, financial firm Thomas Weisel Partners surveyed "several dozen" retailers for a report issued Monday. The firm found that PC unit sales were stronger than expected at most stores, thanks to lower pricing and demand for Windows XP.

The survey said notebook PC sales were particularly strong, owing to lower prices. Sales of consumer electronics devices, including DVD players and digital cameras, were also strong. Overall, revenue was flat for PCs and up slightly for consumer electronics, the report said.