June 21, 2000 11:00 AM PDT

Compaq unveils colorful new consumer PCs

Compaq Computer today launched a new consumer PC strategy as it jockeys to recapture the retail sales crown.

Taking yet another chapter from Apple Computer's marketing playbook, Compaq's new Presario 5000 and 7000 PCs will use a design accented in translucent colors.

In the first major redesign of its consumer line in almost four years, Compaq introduced six new colors--smokey quartz, emerald green, ruby red, amber orange, sapphire blue and amethyst purple--and kits that let consumers change colors later on. Smokey quartz will be the standard color.

Besides new PC models, Compaq also unveiled matching monitors and Presario 1400 and 1700 series notebooks. Presario 1400 portables also will be available in the six colors.

Mike Larson, general manager of Compaq's consumer division, described the new models as "putting personal back into personal computing...We understand the consumer, and we've really tried to design this new line with the consumer in mind."

The new systems, which are part of Compaq's back-to-school line, come at an important juncture for the PC manufacturer. Once the perennial retail sales leader, Compaq has fought unsuccessfully to dethrone Hewlett-Packard, which in February took the market-leading position from Houston-based PC maker Compaq.

May was the third month out of five in which HP beat Compaq, and the future trend is not as bright as Compaq's new colors.

Analysts said Compaq may be introducing the new look just as the color trend begins to fade. Consumers are looking less for bright colors and more for the features and performance that have given HP the edge.

In overall retail market share, including catalog and online sales, HP beat Compaq 36 percent to 31.1 percent in May, according to PC Data. But looking at sales only in brick-and-mortar stores such as Best Buy and CompUSA, HP walloped Compaq with 42.4 percent share vs. 28.9 percent.

"Given the current trend, Compaq is unlikely to catch up with HP anytime soon," said PC Data analyst Stephen Baker. "The move into colors is not enough to fix any sales issues."

Added Lindy Lesperance, an analyst at Technology Business Research: "Not only is HP a tough competitor for them, but the direct vendors are cozying up to retailers. The retail market is only going to get tougher."

For example, Micron earlier this week added new retail partners selling its systems through in-store kiosks.

The new Presarios reflect a mandate from on high--CEO Michael Capellas' direction that Compaq must make "cool" products.

Compaq tested those waters last year, when it introduced the stylized Presario 3500, available in a magnetic blue color with an LCD display. With today's announcement, Compaq is retiring the Presario 3500, except in Japan, where it is a strong seller.

In January, the PC maker added the breadbox-shaped Presario EZ2000 to its consumer lineup. Besides Baja blue coloring, the system offered more with less by replacing legacy serial and parallel ports with USB and IEEE 1394, or FireWire, connections. With today's new product line, Compaq will add a new EZ model, the 2600.

Others have followed suit in a trend Apple started with its fruit-colored iMac. IBM chose dark gray for its new NetVista line, and HP yesterday unveiled color panels for changing the look of Pavilion consumer PCs.

But Compaq may be climbing on a dying trend that could do little to boost sales, Baker said.

"The iMac was a big hit at first, but iMac sales have slowed quite a bit and remain concentrated in blueberry and grape," he said. "If you're talking about bright colors, there has not been a stampede of customers out into oranges and tangerines. People still prefer the muted blues and blacks and sleek grays."

Added Lesperance: "Color is not a differentiator anymore. Everybody is doing it, and customers expect it."

Colors aside, Compaq is packaging lots of extras with the new Presarios, Larson said. "In addition, we're offering home installation and Presario online training--it's for a year with 70 different courses. We're appealing to a breadth of people, whether it's kids who want to rip CDs or grandparents who want to send video emails or people that want to do digital video."

The Presarios also come with a new easy-open supporting frame, similar to that on the Apple's PowerMac G3 and G4 systems and the EZ2000.

 

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