The PC market is still on life support, and maybe it’s because consumers are choosing to update existing systems rather than buying new ones.
The market for U.S. retail computer product sales remained stable, suffering only a 0.7 percent decrease, in 2001 compared to 2000, according to NPDTechworld. Total industry sales for 2001 were $25.7 billion, and positive sales growth was present during the holidays as fourth quarter sales grew 2.2 percent over 2000. December 2001 sales were up 1.7 percent compared to December 2000.
“The decline of the PC market in 2001 had an outsized effect on sales growth,” said Stephen Baker, director of IT research at NPDTechworld. “When we take out PC revenue, the rest of the computer products industry achieved a healthy revenue increase of 9.5 percent. Most consumers are staying away from PC purchases.”
NPDTechworld found that PC revenue fell 20 percent, driven by an 18 percent decline in overall units. According to preliminary data from Gartner Dataquest, worldwide PC shipments totaled 128 million units in 2001, a 4.6 percent decline from 2000. PC shipments in the United States reached 44 million units, an 11.1 percent decline from the previous year (see PC Market Has Nowhere to Go But Up).
|Revenue Growth for Computer Products|
|Q4 2001 vs.|
|Dec. 2001 vs.|
PC peripherals, such as printers, monitors and scanners fell by 7.1 percent from 2000 to 2001, NPDTechworld found. Strong growth in sales of flat-panel monitors and multifunction printers was offset by weakness in heavily PC-dependent categories like inkjet printers and monitors.
The accessory category, which includes mice, cameras, hard drives, handhelds and networking equipment posted a year-over-year revenue gain of 12.7 percent in 2001, driven by sales of PDAs and their accessories, digital cameras, wireless networking equipment and optical mice. Consumable products posted a gain year-over-year revenue gain of 24.9 percent as sales of CD media, printer cartridges and memory cards increased as customers spent on supplies that support new uses of their computer technology.
In previous years, consumers were shopping for new computers or printers. In 2001 the products that sold best were ones that enabled the use of all the new technologies purchased in the last few years or products that provided a demonstrable upgrade over what had been available,” Baker said. “This desire to use what had been bought led to the aggressive growth in consumable products, which have allowed consumers to take advantage of such popular applications as digital photography and CD burning.”
Several new technologies had impressive numbers in 2001. NPDTechworld credits dramatic price declines in LCD panel costs with leading to enormous demand for LCD monitors. Increased popularity of technologies that provide fast external connections to the computer, such as Firewire and USB2.0, led to a surge in demand for plug-and-play storage solutions.
Interest in wireless networking has been supported by the adoption of Wi-Fi standards in the growth in 2001 in hubs, routers and other home networking equipment that still have a huge potential market (see Home Networks Not Connecting with Consumers). Blank CD-R sales had a good year as CD burners have become commonplace and give consumers a new use for their computers. Ink cartridge sales were up despite weak printer sales as consumers use their printers more.
|Fastest Growing Computer Product Categories|
|Q4 2001 vs.|
|Dec. 2001 vs.|
|External Hard Drives||182.0%||64.3%||63.6%|
|Network Access Points||128.3%||97.8%||100.9%|
|Storage Media – CD-R||37.8%||31.3%||23.1%|
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