Reduced cost drives positive market for new computers

Despite a down economy, the outlook for the local retail computer market is positive, according to several area retailers.

Darin Lake, general manager of Gateway Country, said the majority of his customers are purchasing new equipment.

"I'd say probably 80 percent of the people that walk into my store are buying new PCs, as opposed to upgrading their existing ones," Lake said.

How often consumers purchase new personal computers usually depends on the age of their system, he said. If their computer is less than two years old, some people will invest money in an additional hard drive or upgraded memory, Lake said.

"From a broad overview, I think the PC market is very competitive still. We're just now starting to come out of the PC price war," he said. Several name-brand vendors such as Compaq, Dell and Gateway have tried to attract consumers with low-end price points, starting as low as $400 for a basic PC package, he said.

As of three years ago, the average unit price of a PC was around $2,000.

The average unit price in Lake's store now has eroded by almost 50 percent, he said, with most units selling for $1,000 to $1,500.

"I think the market as a whole is becoming more and more saturated. People are holding on to their PCs a little longer than they did in the late 90s and the Y2K era," Lake said.

Mike Green, president of Aztec Computer Outfitters, said depending on the platform, upgrades are somewhat limited on national brand systems.

"If you have a custom-built system, you have the ability to make upgrades and modifications as you go, in which case you're not replacing your machine every couple years," he said.

Although many consumers are able to extend the use of their computers, as a general rule, three years is the average life span of a PC, according to Doug Pitt, owner of ServiceWorld Computer Center.

"Software tends to drive that, but as a practical rule, and in all good honesty, I can pretty much promise three years' use out of a PC," he said.

Lake agreed, noting that computers sold in 1999 and 2000 are now in need of upgrade or replacement.

People are now purchasing their third or fourth PC, Pitt said.

"We're over those first PC hurdles, and the comfort level is a lot better," he said.

Consumers' needs and wants will exist as products change from year to year, Pitt said.

"PCs are pretty perpetual. You can't really stand still because new software comes out and needs increase," he said.

The PC market continues to cycle as consumers strive to stay current with the latest technology, Pitt said. LCD monitors are among the top sellers these days, he said. People are switching to flat screen LCD monitors for looks as well as desk top space, he said.

"Right now, I do see growth. Uses for PCs are only growing, and as software gets better and better, more people get involved," he said.

Typically, December sales are strong as people purchase equipment before the end of year for tax reasons, Pitt said, and then January sales tend to be weaker. December 2002 wasn't as strong as Pitt anticipated, but sales rebounded in January.

"It's been a real strong 2003," he said.

Green said that although the fourth quarter of last year did not hold up to many retailers' expectations, Aztec's sales so far this year are improving.

"We have the highest level of sales in the last three years," Green said.

Not all retailers experienced slow end of year sales.

Lake said for the past several years, business at his store has grown by 14 percent during the last four months of each year.

Whether a PC is used for playing games or running a business, Pitt said he couldn't stress enough the importance of virus protection.

"It's probably the single biggest problem, as a whole, that we see in the corporate market," he said.

Keeping virus definitions updated is equally important he added.

"It doesn't do any good to load it and then leave it alone," he said.