Comdex Convention Now in Anaheim : PC Market Is Stronger Than ‘84, Says Expert

The news from the personal-computer front appears bleak, beset as the industry is with layoffs and product suspensions. But at least one expert is advising retailers in the relatively new and highly seasonal industry to look beyond the headlines.

“It’s the growth rate that’s slowing. The market isn’t shrinking; it’s growing. . . . It’s better today than it was a year ago,” Egil Juliussen, chairman of Future Computing Inc., the widely respected Dallas-based research firm, told a skeptical audience of personal-computer merchants at the Comdex convention in Anaheim Thursday.

Juliussen’s pitch flies in the face of conventional wisdom that the market for small-business and home computers is again on the downside of its roller-coaster ride of the past few years.

The conventional wisdom was supported by this week’s announcement that International Business Machines Corp. will suspend production of its PCjr and earlier news of a weeklong manufacturing furlough at Apple Computer Inc.

But Juliussen argued that retailers should not necessarily conclude that the personal- computer market is suffering. The current slowdown, he said, is typical of the season.

January sales, although just half of the red-hot December pace, were still substantially ahead of those of January, 1984, he said, and better than any month of 1984 except November and December.

Although Juliussen provided no sales figures, his analysis was largely supported by data collected by InfoCorp, a Silicon Valley-based computer-research firm. According to InfoCorp, 344,000 personal computers were sold in December, more than twice the 167,000 units sold in January. In March, 1984, the earliest month for which InfoCorp has data, just 129,000 units were sold.

Juliussen’s argument was supported earlier in the day by Michael Shabazian, president of domestic operations for ComputerLand, the nation’s largest retail franchiser. “We are stronger now than we were last year at this time,” Shabazian said. “And that’s a surprise we had not counted on.”

According to Future Computing’s analysis, retailers, particularly inexperienced, independent operators, are bearing the brunt of the sales problems. And it is these people, the analysis holds, who are likely to blame their troubles on an industry slowdown rather than on increasingly fierce competition.

“It’s a period of competitive turbulence, but not a shrinking market,” said Bill Ablondi, a Future Computing vice president.

Market to Grow

The research company has projected that the market for personal computers will grow 22% annually for the rest of the decade, about half the rate of the early 1980s. The bulk of those sales, Future Computing predicts, will be to small-business and home-computer users.

The number of personal computers in small businesses will increase fourfold to 6.8 million by 1989 from 1.5 million in 1984. Homes with personal computers, whether for business or pleasure, will number 40 million by the end of the decade, more than three times the current level of 12 million.

The company also predicts that computer specialty stores--which already account for nearly half the sales--and especially the large franchised operations, stand to pick up a sizable portion of the sales, Juliussen said.

But Juliussen said other retailers, particularly the so-called independents who make up the bulk of those attending the Comdex show, can protect their sales by broadening the merchandise and services they offer.