Traditional market segments are changing in the home PC sector and vendors need to completely rethink marketing strategies, an industry analyst warned today.
Speaking at the Dataquest Predicts 99 conference in Paris, Paolo Puppoli said up to now, home PC vendors targeted products at four market areas: home-office; games users; home family users; and students.
"This model is now outdated," said Puppoli. "In order to avoid the mistakes made by companies such as Levi's and Marks and Spencers who have recently lost huge market share by not recognising that generations change, PC vendors will need to change."
He added that so far, only one company has got this right.
"Apple has realised that some people buy PCs to be trendy. Apple offers one processor speed per quarter, thereby avoiding complications faced by other vendors who stick to each microprocessor release. It also offers a range of colours. Apple segments its market into lifestyles and gains in supply chain," he said.
Puppoli warned that if vendors do not take action soon, new players could enter the market and take market share away from traditional players.
"When the generation of Sony Playstation users grows up and is looking to buy a PC, Sony could bring out a product and take significant market share away from vendors like Compaq," he warned.
He said the greatest area of growth in the home PC market would be in mobile PCs.
"Vendors are now starting to offer notebooks in the European market place and are gaining higher margins. In Japan last year the notebook market represented 44.7 per cent of total consumer PC sales. This growth was a result of space benefits offered by mobile PCs. In Europe we have the same space constraints as Japan, we do not have large houses like the US," he said.
Puppoli forecast a 20.8 per cent compound annual growth rate (CAGR) for home notebook PCs in Europe between 1999 and 2003, compared to a 10 per cent CAGR for desktop PCs.
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