January 21, 1999 1:25 PM PST

iMac sales keep rolling

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The marketing phenomenon known as the iMac just keeps rolling along.

Research firm PC Data today issued a report saying the iMac was the overall top-selling PC system during the fourth quarter, a result Apple Computer was quick to tout on its Web site.

How well it really did, however, depends on where one looks.

According to another research firm, ZD Market Intelligence (ZDMI), the iMac was the fourth best-selling system during the fourth quarter, behind three Compaq Presario models.

The difference lies in how sales were measured by the two firms, and shows the importance of the various sales channels to Apple's overall efforts. ZDMI measured sales at computer and office superstores, consumer electronics retailers, and other dealers. PC Data's measurements for the quarter also included sales from mail order/online operations.

For instance, PC Data's numbers show the iMac was the third-most-popular system in December, behind two Compaq Presarios. That was a slight drop from November, when the iMac was ranked as the top-selling PC. ZDMI listed the iMac as the seventh best-selling system when mail order results are not counted.

"Apple has gotten a product out there that their customer base wanted, and done a great job of getting it to them," said Stephen Baker, senior hardware analyst for PC Data. "When you look at retail only, they don't exactly blow the doors off the world," though its 1998 results are significantly improved over the year prior, he said.

Apple isn't doing anything wrong, per se, in retail stores, analysts say. "Apple has made a stellar turnaround in retail compared to where they were last year [in terms of market share]," said Matt Sargent, an analyst for ZDMI. The company does better in mail order, though, because its customer base has always been predisposed to buying without a lot of intervention from a salesperson, he notes.

To improve results in the retail stores, Apple needs to continue to lower the price of its systems--which currently stand at about $1,199--to compete more effectively against sub-$1,000 offerings from other PC vendors, Sargent said.

It isn't clear how well Apple itself is doing with its direct sales efforts, because neither research firm gets sales numbers from Apple. Results from both firms also do not include sales from direct-only vendors such as Dell Computer and Gateway.

Compaq has big Christmas
After experiencing stiff competition from Hewlett-Packard and other vendors, Compaq rebounded to claim 38.5 percent of all PC sales in consumer and mail-order channels, PC Data said. Packard Bell NEC, which posted 1998's first year-on-year sales growth in December, was a distant second with 20 percent market share.

Upstart eMachines was right behind the iMac with the fourth best-selling system for the month, and has vaulted the company into a position as the sixth-largest PC vendor overall.

"The big question about eMachines is how they will make money. People with [a larger line of PCs] can do things to make their business work," said Baker. eMachines' PCs, on the other hand, were priced a lot lower than anyone else. The company has expanded its product line to include more expensive models, which should help the company finally make some money off of all of its sales, Baker said.

 

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