For those that couldn’t have worked it out for themselves it, or whose bosses need the authority of a report before they will act on anything, it is now official that as microcomputer markets mature and the personal computer becomes a commodity (which it did about four years ago) further shifts in distribution are on the way. The report, Microcomputer System Distribution Analysis, comes from Market Intelligence Inc of Mountain View, California, which forecasts a further migration to to indirect channels like distributors and new breeds of retailers like superstores and mass merchandisers.
Systems integrators
At the same time, it says, systems integrators and value-added resellers will become increasingly important to distribution of higher-end products like commercial workstations. It sees direct sales to end-users declining as a share of personal computer and commercial workstation market revenues to 16% in 1998 from 21% in 1992, with the share held by distributors rising to 15% from 9% and that of systems integrators and value-added resellers to 20% from 12%. Retail outlets, while remaining the bigest single channel, will gradually decline as a portion of the whole as mass merchandisers and superstores gain share while the once-dominant dealers lose even more, the report suggests. Retail sales overall will see less than a 5% compound annual growth rate while the much smaller distributor channel grows at a nearly 20% compound annual rate, it forecasts to become the fastest-growing element, with systems integrators and value-added resellers close behind. Distributor revenues from sales of personal computers and commercial workstations will grow to $12,800m in 1998 from less than $4,000m in 1991. Total US microcomputer system markets are projected to grow to nearly $84,000m by 1998 from $48,000m in 1992, with commercial workstations, sublaptop and notebook computers setting the pace – but that $84,000m figure looks like an underestimate unless unit prices continue to plunge over the period. The forecast that desktops and portable laptops will decline as a share of the overall microcomputer system market, while sublaptops and commercial workstations increase their share during the 1990s sounds unexceptionable. The report sees desktops dipping to under 71% of total US microcomputer system revenues by 1998 from 81% – reflecting dramatic price drops and market maturity, the report says – while sublaptops rise to 13% from 7% during the same period and commercial workstations increase in share to 9% of revenues from 4% – but there is a problem of definition here: is a Pentium machine running Windows 3.1 a desktop and a Pentium machine running UnixWare a workstation? Which is it if it is running NT? Integrators and resellers, the report says, already had 41% of the commercial workstation market in 1988 and will increase that to 52% in 1998, with direct sales falling to 24% from 36% over the period and OEM sales also falling. By 1998, 11% of workstation value is expected to be retail. Direct sales will increasingly move from the field to the mail and the phones. OEM business will grow significantly, the report suggests, particularly for sublaptop and notebook computers, though it will remain less than 4% of the overall market. The report was not received for review, and Market Intelligence gave no price.
