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December PC sales slide
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January 3, 2001: 3:02 p.m. ET
Unit shipments, average prices plummet from same period last year
By Staff Writer Richard Richtmyer
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NEW YORK (CNNfn) - For PC makers, this holiday season was anything but merry.
Sales of desktop computers both through retail stores as well as through mail order, declined roughly 24 percent, according to preliminary figures compiled by research firm PC Data.
That's the largest year-over-year decline in the past four years and represents the fifth consecutive month that annual unit sales have fallen from their year-ago levels.
PC Data analyst Stephen Baker attributed the sharp decline primarily to the weakening U.S. economy and its impact on consumers' inclination to spend on big-ticket durable goods.
"The PC is a big durable goods item now," Baker said. "When the economy is slowing, people tend to reduce their spending on those kinds of things."
The lack of a compelling reason for consumers who purchased PCs over the last two years to replace them also contributed to the declines this year, Baker said. He noted that in 1999, there were far more Internet service provider rebates providing consumers an incentive to buy PCs.
Retail PC revenue in December fell to $855 million, down nearly 30 percent from 1999, PC Data said.
Meanwhile, in an indication of slowing sales, December retail selling prices fell 7 percent from December 1999 to $846, the lowest monthly average price of the year, PC Data reported.
"Typically, we see flat or slightly rising prices in December, because people are usually willing to pay more," Baker said.
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People didn't stop spending money, they just spent it on things that complement their PCs.
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Stephen Baker
PC Data |
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In all of 2000 , the average selling price of a PC fell $10 to $906 from $916, which the firm said reflects both the slowing impact of computers priced below $600 and the richer configurations PC makers provided during the early part of the year.
For the full fourth quarter, unit sales of PCs were slightly below 2.5 million, more than 18 percent below the fourth quarter of 1999. Average selling prices fell to $872 from $878 for the quarter, PC Data said.
While PC sales and prices fell in December, Baker pointed out that the overall computer products business still "looks like a good place to be." In November, sales of handheld computing devices including Palm Pilot's, Handspring Visor's and Pocket PCs more than doubled from the same period a year earlier, he said.
"People didn't stop spending money, they just spent it on things that complement their PCs," Baker said.
Other product categories that showed sharp annual revenue increases in November included MP3 players, which rose 400 percent; PC Web cameras, up 68 percent; re-writeable CD-ROM drives, which were up 65 percent; and digital cameras, which rose 26 percent, according to PC Data's research. 
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PC Data
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