Low prices drive March PC sales

Although overall unit sales held up at retail stores in the United States during March, despite the start of the war in Iraq, average selling prices for both desktop and notebook PCs stayed near all-time lows set in February, according to new data from NPD Techworld.

PC buyers shopping at retail, consisting mostly of consumers and small businesses, continued a trend toward purchasing low-priced hardware. The average selling price for a desktop in March was $719, nearly the same as February's low of $717. The average price for a notebook PC increased by $60 to $1,373 in March from the previous month, according to NPD.

The result of this trend toward purchasing lower-priced computers has been a steady decrease in average selling prices and a large increase in unit sales of the least expensive computers, including desktops priced under $800 and notebooks priced under $1,200.

Overall, March's desktop unit sales were down 11.5 percent year over year and down 4.5 percent sequentially from February. Notebook unit sales were up 2 percent year over year and flat with February's sales.

"Looking at the numbers on a month-to-month basis, you see (that) there was a little bit of weakness in March, probably due to the war," said Stephen Baker, analyst with NPD.

Sales of portable computers were nearly flat in March after seeing double-digit increases year over year of 15 percent in January and 23 percent in February, Baker said.

Sales of notebooks have been pulling the U.S. retail market along for some time, bolstering unit sales and also revenue, as the average notebook sells for nearly double the price of an average desktop.

Although the war failed to hurt unit sales on a large scale, it didn't stop bargain shoppers.

Unit sales of notebooks priced under $1,200, the least expensive category, increased 50 percent in March year over year. Previously, year-over-year sales in the category had shown increases of 153 percent in January and 125 percent in February, Baker said.

Notebook unit sales in the $1,200 to $1,800 category were down by 20 percent year over year, similar to declines in the two previous months. Finally, models priced at $1,800 or more were down by 8 percent in March, after seeing year-over-year increases of 28.4 percent in January and 18.6 percent in February.

Desktop sales trends mirrored those of notebooks. Only the under-$800 category posted any growth, with units increasing in March by 9.3 percent year over year.

March unit sales of desktops for $800 to $1,500 were down 42 percent year over year and those for $1,500 or more were down 22 percent year over year.

The bulk of the sales in the desktop PC market have been on the low end, showing that most buyers apparently feel satisfied with a $700 or $800 desktop or a $1,200 notebook, Baker said.

"The fact of the matter is what people want to buy doesn't fit well into midrange prices. The things you get there--components such as faster processors, DVD burners or high-end graphics boards--are things people don't see any value in right now," Baker said.