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March 12, 1987

GARTNER COMES OUT WITH SOME SURPRISING FORECASTS FOR IBM’s MID-RANGE SALES

By CBR Staff Writer

As one of the best-respected and most widely-followed IBM watchers, Gartner Group in Stamford, Connecticut has to be taken very seriously indeed. But some figures from the Group on IBM’s mid-range market in the US over the period 1986 to 1989 are disconcertingly at variance with what subjective observation suggests are the current trends:

1986 1987 1988 1989

System 36 50,000 55,000 40,000 25,000

System 38 4,500 5,600 7,600 11,000

9370 100 8,000 25,000 30,000

The figures are particularly disconcerting because some look way too high while others look much too low. With all the current uncertainty over System 36, it would be surprising if IBM were able to sell more 36s this year than last, even given that it is now pushing the bottom end low-price System 36 Personal, which has just been given another facelift (CI No 637). And the suggestion that it will be selling even 25,000 in 1989 seems distinctly far-fetched. It is harder to get a handle on System 38 because IBM itself really can’t decide whether to phase the machine out or build it up, but 38 fans will take heart from the Gartner forecast of over twice as many sold in 1989 as last year, though we fear they may be disappointed. As for the 9370s, that 100 last year is mainly the machines that IBM delivered to itself as part of the contract it is fulfilling for United Airlines to put together a travel agents’ system that the airline can offer to its customers. But even with the problems of training enough people to support the new low-cost machines surely IBM can get more than 8,000 9370s away by the end of this year. And the forecasts of 25,000 and 30,000 for 1988 and 1989 look low as well: all the signs are that IBM needs to sell at least twice that number of 9370s even to begin to put a rein on DEC’s runaway progress with the VAX.

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