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July 15, 1991

USERS TREAT PRICE WARS IN PERSONAL COMPUTER BUSINESS AS CHANCE TO STOCK UP

By CBR Staff Writer

The price wars in the personal computer industry are welcomed by users who are taking advantage of the situation to both increase the number of personal computers they buy and to upgrade to more powerful models. An InfoWorld survey canvassed 100 large corporate buyers in the US, each responsible for buying more than 575 personal computers in the coming year. Some 43% of those surveyed said recent price declines have positively impacted their companies’ personal computer purchasing plans, with more than half indicating that they expect to buy more personal computers while 33% are looking to buy more powerful models. Meanwhile International Data Corp has found that while in September 1990, customers were paying up to a 50% premium in the street price of a Compaq Computer Corp or IBM Corp desktop compared with similar compatibles, by May 1991, the price differential between computers from a major personal computer compatible vendor compared with IBM was just 4%. According to the InfoWorld study, the vast majority of corporate buyers some 84% – said they expect prices to continue to decline over the next 12 months. Only one in ten indicated plans to delay future purchases because of the possibility of more price cuts. The average delay for those that decide to wait is 74 days. Compared with a year ago, 46% of corporations are more likely to purchase no-name clones rather than name-brand machines, while 20% indicated that they were less likely to buy a compatible. Respondents cited price, speed and features, as the top three reasons for selecting a compatible over a name-brand offering from IBM, Compaq or other established manufacturers. Service and support were cited as the primary reason for buying a name-brand personal computer. InfoWorld also examined the issue of name-brand purchasing in the laptop arena – while 40% of the survey respondents said they are willing to pay a premium for a name-brand desktop, only 30% will pay premium prices for a name-brand notebook. For both desktop and portable personal computers corporate buyers indicated they would pay as much as 19% premium for a name-brand model.

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