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NPD: Computing Product Sales Up 2.5 Percent

3/06/2003 09:11:00 AM Eastern

Port Washington, N.Y. - Consumer sales of computing products rose 2.5 percent during the second half of 2002 to $25.6 billion, according to a study by The NPD Group.

The research firm, based here, said the buzz surrounding companies like Dell did not equate into blockbuster consumer sales for the latter half of last year. Brick and mortar retailers picked up the vast majority of sales, 64.2 percent, a 3.3 percent increase for sales of $16.7 billion, while vendor direct companies like Dell and Gateway experienced 1.3 percent growth for a sales total of $8.9 billion. Share for these firms was 34.8 percent, down slightly from 2001.

'Reports of the demise of brick and mortar retailing, in the personal computing category were greatly exaggerated,' said Steve Baker, director of IT Research for The NPD Group.

These numbers reflect the sales of all computer-related products, except software. NPD also noted that sales for all of 2002 sales hit $47.7 billion, but the company did not break down the figure.

Baker attributed the retailer's success to their ability to offer a wide selection of brands and product categories enabling them to take advantage of growth in products like consumables.

PC and laptop sales continued to be the driving force for the vendor direct category accounting for 85 percent of all sales, Baker said. However, PC sales still struggled, falling 7 percent compared to the second half of 2001. This was slightly offset by the 3.5 percent increase earned through notebook sales, Baker said.

Dell's foray into the printer category and Gateway's attempt to sell plasma TVs is an excellent indicator, Baker said, that these companies recognize their limitations of their current merchandise mix and the need to expand into high growth categories.

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