Spurred by growing sales, the average purchase price of a personal computer fell below $1,300 for the first time last quarter, despite a slight dip in the market share of the sub-$1,000 PC, according to new report by Computer Intelligence.
Consumers lured by falling prices and a desire for
Average selling price
of desktop PCs
in US retail market
|Source: Computer Intelligence|
Not surprisingly, price-conscious consumers fueled that growth. "There were a number of factors driving that," said Aaron Goldberg, executive vice president for CI. "The Internet has become a reality in many people's lives, and price points were at levels they had never been before."
While PCs with a price point under the $1,000 mark comprised around 30 percent of the market in the fourth quarter of 1997--down from an earlier high of a bit more than 40 percent--the average price continued its yearlong fall. The sub-$1,000 market claimed less than 10 percent at the beginning of the year.
Part of the low-cost market's decline owes to the fact that retailers don't market sub-$1,000 PCs as aggressively as PCs in the $1,000-$1,250 price range, CI stated. Sub-$1,000 systems have notoriously low profit margins.
Compaq placed first in the sub-$1,000 race, taking over 44 percent of the fourth quarter market. Packard Bell finished second with 35.3 percent, while Hewlett-Packard jumped from a 0.3 percent share in September to 15.2 percent of the market in December.
"HP finally put a good low-end product in the mix?Apple only has CompUSA left and IBM's on the fence with their consumer business. They can't let it get away from them," he said.