Report Spotlights AST's '95 Decline in Market Share and PCs Shipped

Report Spotlights AST’s ’95 Decline in Market Share and PCs Shipped

By GREG MILLER

Jan. 31, 1996 12 AM PT

TIMES STAFF WRITER

IRVINE —

While the rest of the computer industry grew by more than 20% in 1995, the number of PCs shipped by AST Research Inc. shrank 26% and the company’s share of the U.S. market fell to its lowest mark in years, according to a report by an industry research firm.

The report by San Jose-based Dataquest Inc. spotlights the isolated struggles of AST, the only company among the 10 largest PC manufacturers to post a year-to-year decline in shipments.

As a result, AST fell from seventh to 10th place in U.S. market share, displaced in the rankings by Hewlett-Packard, Acer America and Toshiba, an Irvine-based company that makes only notebook computers.

Scott Miller, an analyst at Dataquest, said AST is struggling to maintain shelf space at retail stores and halt the erosion of its brand name among corporate customers.

AST’s “products are price-competitive, but the name doesn’t pull sales through any more and the company is on the rocks,” Miller said. “Right now AST presents too many risks to corporations.”

In 1994, AST shipped 722,000 computers and held 3.9% of the domestic PC market, according to Dataquest. But the number of shipments plunged to 536,000 in 1995, and the company’s market share dropped to 2.4%.

Miller said that after AST bought the computer manufacturing operations of Tandy Corp. in 1993, the combined shipments of the two companies placed it fourth among U.S. manufacturers.

But troubles digesting that acquisition were followed by product delays and manufacturing problems that have plagued the company in recent years. Last week, AST reported a $129-million loss for the last quarter of 1995, bringing total losses over the past six quarters to $324 million.

The company received a $378-million cash infusion from Samsung Electronics last year and hired Ian Diery, a former Apple Computer executive, to lead an AST turnaround.

But the PC market has grown increasingly cluttered during AST’s prolonged tumble, and such upstarts as Gateway 2000 and Dell Computer have elbowed into top positions alongside long-standing stalwarts such as IBM and Apple.

Miller said AST has fared better internationally than in the United States in recent years.

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Losing Ground

AST Research’s market share fell in 1995, dropping the Irvine-based computer firm from seventh to 10th place in the U.S. market. Market share for 1994 and 1995:

1994

1. Compaq: 12.6%

2. Apple: 11.6%

3. Packard Bell: 11.4%

4. IBM: 9.0%

5. Gateway 2000: 5.2%

6. Dell Computer: 4.2%

7. AST Research: 3.9%

8. Toshiba: 3.6%

9. Acer America: 2.4%

10. Hewlett-Packard: 2.4%

Others: 33.7%