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Consumers snap up computers on Black Friday

Sales of PCs rise 35 percent over a year ago, as Americans give thanks on Thanksgiving by using their credit cards.

Computer makers can breathe a sigh of relief--people did scoop up a lot of laptops during the holiday shopping extravaganza last week.

Sales of personal computers in U.S. retail outlets during Thanksgiving week increased 35 percent over the same week the year before. Overall revenue increased by 11 percent, better than expected, according to research firm Current Analysis. In 2004, computer sales increased by only 7 percent while revenue decreased by 3 percent.

Thanksgiving week is a crucial period for retailers and electronics manufacturers, as a significant bulk of the holiday sales occur then. The most active day remains Black Friday, the day after Thanksgiving.

Although sales of PCs and electronics have been strong this year, part of the growth has been fueled by price cuts. The worry, among some analysts and executives earlier in the year, was that price cutting could eliminate the benefits of increased unit sales. While price cuts clearly did reduce some of the potential gain, the increase in revenue will likely buoy the outlook for some.

"This shows that the (computer electronics) industry has got some legs," said Matt Sargent, an analyst at Current Analysis, who added that the results were higher than expected. The research firm had anticipated that revenue would grow by only around 2 percent to 5 percent. The Thanksgiving week represented the single strongest week ever for notebook sales, he added.

Current Analysis will release results for TVs and other electronic devices next week. Sargent, however, believes that TVs will probably lead all products in terms of growth.

Wal-Mart in particular tried to boost its market share through price cuts. It sold a $398 laptop from Hewlett-Packard and Motorola Razr phones at a discount. In some cities, customers pushed, shoved and even fought each other to get into Wal-Mart at 5:30 a.m. on Black Friday.

Notebooks continued their strong trajectory. Laptop sales increased by 48.6 percent in unit volumes and by 21 percent in terms of revenue during the week. Notebooks also accounted for 52 percent of sales, the first time that notebooks have surpassed desktops during this week, according to Current Analysis.

Desktop sales increased as well, but were hurt more by falling prices. Desktop sales increased by 23 percent in terms of unit sales, but revenue declined by 4 percent.

The numbers do not include direct sales from manufacturers like Dell or international sales.