Many Pc Buyers Will Wait Until After Christmas But Computers Are Still The Hottest Items For Holiday Sales In An Otherwise Dreary Season

Like millions of families around the country, Marian Dresser, her husband and three children have been visiting stores and scouring newspaper ads this month in the hunt for a home computer.

And like many of those families, the Dressers have decided to wait until after Christmas to buy, anticipating that prices will drop into their range.

“We’ve been going back and forth to the stores,” said Dresser, a teacher in San Antonio. “We read the stories that Apple was cutting prices. But the salesmen say, ‘No, not till the first of the year.’ That shoots Christmas.”

With sales up about 30 percent, personal computers have shined in an otherwise dreary holiday season for retailers. But not everything is merry for PC makers.

Sales growth isn’t as high as last year, in part, because manufacturers sharply tilted their product mix to more advanced and expensive machines. That strategy yields more profit but puts off people like the Dressers who don’t want to spend $2,000 for a computer.

In addition, nearly two-thirds of buyers this holiday are in households that already have a PC, which suggests a slowing of market penetration.

“The volumes aren’t what they expected,” said Aaron Goldberg, analyst at Computer Intelligence-Infocorp, which tracks sales at stores. “This market has grown so huge there aren’t 3 or 4 million more households that can’t wait to have one.”

John Roach, chief executive of Tandy Corp., which owns Radio Shack and Computer City stores, said sales will be close to expectations.

“Advertising has been greater, credit promotions have been more widespread and so it’s a much more competitive market,” Roach said.

This month illustrates the difficulty the computer industry has balancing the desire for more buyers with the need to make money.

PCs are now in about 40 percent of all U.S. households and in a majority of households with incomes exceeding $50,000. Industry leaders want them to eventually be the central appliance for communications, particularly as data networks improve and more information services become available. But first, they’ve got to figure out a way to make them more affordable.

Richard Zwetchkenbaum, analyst at International Data Corp. in Framingham, Mass., says the high percentage of sales to homes that already have PCs is a problem since computers still aren’t even in half of all households.

“The industry hasn’t really stepped up to the plate to address those elusive unpenetrated households,” he said.

PC makers traded growth for profit this holiday season. They zeroed in on the phenomenon that, to hold obsolescence off a little longer, the people who will spend $2,000 for a PC will pay a few more hundred dollars for one with a faster chip.

Channel Marketing Corp., a Dallas-based research firm, estimates that 80 percent of the computers on store shelves this month cost more than $2,000. A year ago, just 30 percent did. And the average selling price is expected to be about $2,100, up from $1,800 a year ago.

“If we had more machines under $2,000 and closer to $1,000, we could have really blown the doors off last year,” said David Goldstein, analyst at Channel Marketing.