2001 PC Registry Outlook Volatile
By Doug Olenick -- TWICE, 6/25/2001
If 2000 saw little movement among the top PC sellers, the opposite is likely in 2001.
Circuit City is poised to potentially make the biggest move, if its plan to boost high-tech product sales pans out. The chain dumped its major appliance section to gain more room in its stores for items like home networking, handheld devices and other cutting edge categories. The fact this change coincided with the downturn in the economy and during a period when PC sales are dropping might limit Circuit's success.
Gateway is also facing a much different world in 2001. The direct and brick & mortar retailer closed down 57 unproductive Gateway Country Stores earlier this year. On the other hand, company CEO Ted Waitt has stated that he is refocusing Gateway's efforts back on the PC, after an effort to expand into Internet appliances, Web radios and home networks. Gateway also suffered a blow when OfficeMax decided to dump it as the sole supplier of computers to its 950 stores. Hewlett-Packard products and configure-to-order kiosks are scheduled to replace the miniature Gateway Country Stores that had been inside each OfficeMax.
Gateway could receive an even larger headache from Dell. Company founder Michael Dell last month fired the opening salvo in a new PC price war and has previously said he wants his company to own an even larger slice of the consumer PC pie.
PC Connection should see its fortunes increase. Last month it bought out Outpost.com (formerly Cyberian Outpost) in a stock swap. Outpost posted sales of $332 million in 2000, which if maintained and added to PC Connection's $1.4 billion, could move the newly enlarged e-tailer up several places.
In all likelihood, a few retailers already have made their last appearance on the TWICE Registry. Micron PC sold off its retail PC division in April, just after announcing the expansion of its in-store kiosk plan. West Coast Mac specialty chain ComputerWare also closed shop in April. The 17-year old, 10-store chain unexpectedly shut down, despite a 10.5-percent increase on sales of $63 million.
Last week, Nationwide Computers & Electronics, No. 34 announced that it was shutting down its operation.
And finally, PC retailing may also take a beating when the 2001 numbers are finally tallied. International Data Corp., Framingham, Mass., has revised its PC sales forecast for the year and is calling for U.S. sales to fall. If this holds true, it would be the first decline ever suffered by the category. The research company noted a number of factors for the fall off, including bloated PC and hardware inventory levels in the channel and the slowing economy.
