PC sales fall in US

Personal computer sales have been disappointing

Sales of personal computers (PCs) in the US are falling, according to a survey of retailers.

PC sales slumped by a quarter in December 2000 when compared to a year earlier, says independent research group PC Data.

Consumers (have shifted) purchases away from PCs and into the new 'digital toys' of the 21st century

PC Data's Stephen Baker

That was the fifth month in succession that PC sales have dropped year-on-year.

It helped make 2000 the first year not to see an increase in PC sales, according to the report.

The figures illustrate the troubled times computer firms have been suffering.

A string of big names - including Intel, Compaq, Apple, Microsoft Hewlett-Packard and Gateway - have been forced to issue profits warnings.

One million sales

The fierce downturn in PC and mobile handset sales has been blamed on a global economic slowdown and the market reaching saturation point.

Direct mail and retail outlets sold just over one million desktop PCs in December, the independent research group PC Data found.

This was accompanied by a corresponding drop in revenue - it fell last month to $855m (£573m), down almost 30% from 1999.

"A spike occurred during the week before Christmas, but it fell short of the boost needed to lift overall sales during the holiday shopping season," said PC Data's spokesman Stephen Baker.

He put the decline down to a number of factors, including the slowdown in the US economy, slightly higher prices for PCs in 2000, and the fact that consumers who have bought computers in the last two years are not upgrading them.

Portable devices

But sales of handheld devices like Palm and Pocket PC more than doubled in November, compared with 1999.

Sales of MP3 players rose by a huge 400% and sales of web PC cameras were up 68% compared to 1999.

"Despite these poor PC results, the overall computer products business still looks like a good place to be, " said PC Data's Stephen Baker.

"We anticipate that computer retailers will see a 10-12% increase in revenues for the fourth quarter, driven by the new digital upgrade cycle, as consumers shift purchases away from PCs and into the new 'digital toys' of the 21st century," he added.