PCs pick up at retail

Retail sales of desktop and notebook computers rose by 27 percent in August, a sign that the market may have turned a corner, according to the NPD Group.

John G. Spooner Staff Writer, CNET News.com
John Spooner
covers the PC market, chips and automotive technology.
John G. Spooner
2 min read
Back-to-school sales helped PCs to a strong showing at retail in the United States during August, new data from the NPD Group indicates.

Retailers saw PC unit sales rise by 27 percent in August, a month that saw a number of promotions for students, compared with the same month a year ago. Notebook unit sales, which drove most of the increase, were up 55 percent. Desktops advanced by 14 percent, according to the NPD Group, which tracks sales of computer equipment at retail.

This year's August results show that the retail computer market may be improving, NPD Group analyst Steve Baker said. Flat-panel monitors, printers and even PC components such as hard drives all saw higher sales, according to NPD Group. That helped boost overall revenue for computer equipment sold in stores by 14 percent over the previous year.

"There were a lot of products that really just exploded," Baker said. "We seem to have turned the corner in terms of pricing and people's recognition that, as part of what they want to do, they need to have an up-to-date PC."

Baker pointed out, however, that PC sales aren't necessarily being driven just by people's desire to have something new or faster.

"Its categories like wireless, LCD monitors and digital photography (that are driving sales)," he said. "It's that, not (people saying) that, 'My PC doesn't run (Microsoft) Excel well anymore.'"

The breakdown
The August results for notebook PCs continued a monthslong trend of higher sales. But the average selling price for a notebook slipped to $1,334. The figure, which is one of the lowest in recent months, most likely reflects people looking for bargains taking advantage of back-to-school promotions, Baker said.

"What a lot of back-to-school shoppers were looking for were value-oriented products. You look at the specs of what you get for $1,000 or so (in a notebook), and it's awfully attractive for a college student," he said.

Most notebooks that sell for around $1,000 come with features such as a 15-inch display, 256MB of RAM, a combination CD-burner/DVD-ROM drive and an Intel Celeron or an Advanced Micro Devices Athlon XP-M processor.

Strong notebook sales have helped August begin to challenge November for the title of second-busiest month for PC sales at retail, Baker said. (December is the leading month.)

Desktop sales were also healthier in August, with a 14 percent increase over last year. Revenue for the category was flat--a somewhat positive sign, following a long streak of declines in unit sales and revenue.

But desktop PCs look likely to continue to be a tough market for manufacturers, as most sales now come in well below $1,000, making it more difficult to squeeze out a profit. The average retail price of a desktop PC in August was $725, only slightly higher than last February's all-time-low of $717.

During August, 45 percent of desktops sold in stores were priced at $600 or less, according to Baker.