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Software Sales Decline In 2003

2/23/2004 02:00:00 AM Eastern

In a rather ironic twist, the computer software industry may well have to thank the continued threat of Internet viruses and the United States' extraordinarily complicated tax code for limiting the decrease in sales the category suffered in 2003.

According to a report issued by The NPD Group, software sales endured a dollar and unit sales fall-off in 2003 with sales decreasing 4 percent to $3.7 billion last year, and unit sales dropping 9.5 percent to 102 million. Steve Baker, NPD's PC industry analysis director, said strong sales of system utilities, business, finance and personal productivity titles helped limit the damage inflicted by poor sales of educational, operating systems, games and imaging and graphics applications.

Baker noted that finance software was a popular choice among consumers with unit and dollar sales rising 6 percent last year compared to 2002. Five of the top ten best-selling software titles were tax products, he said. System utility, which includes PC security programs, unit sales grew 13 percent to 9.8 million in 2003. This is on top of the 12.3 percent increase the category enjoyed in 2002.

PC gaming, despite its troubles, is still the overall leader for the category accounting for about one-third of all revenue and 50 percent of the unit sales. However, the segment saw a 14 percent decline in unit and dollar sales. Educational software in 2003 continued the fall off started the prior year. Unit volume fell 26 percent on top of the 25 percent drop that took place in 2002.

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