NPD today released some good news about sales to small and medium business through the reseller channel, what us old timers used to call the DMR (direct marketing reseller) channel. Sales in December were very strong, posting growth of 7 percent year-over-year, the first time this segment has shown positive growth in more than 15 months.
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Apple just finished introducing their latest product; the iPad. Small, slick, typically great looking, and well priced at $499 it is an interesting, but ultimately not breakthrough device. In fact it reminds one very much of a netbook. A companion device to your main computer (or iPod in this case) that allows you to have a more focused web experience and a more media-centric device at a lower price, which is much of what the netbook is evolving towards.
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This year’s CES was four days of meetings, events, booth tours, and crowds as it is every year. But this year’s show was, unlike last year, imbued with a sense of optimism and opportunity that was absent in 2009. At times even the most innovative and interesting products can get lost in a sea of product demos, displays, and PR hype. And while knowing what is new and noteworthy is the first question people ask me, it is often the last thing I care about. Because, it’s not what’s on the show floor that’s always most important, it’s what ends up in consumers’ homes, sooner rather than later, that counts because that’s where the money is. And what’s new, innovative, and different at CES is often a bit away from hitting the store shelves or being relevant to a mainstream consumer.
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NPD’s Weekly Tracking Service showed consumer technology revenue for the 2009 five week holiday period was down slightly less than 1 percent, year-over-year. While that result is far from the halcyon days of the mid-decade, it is a far better performance than 2008’s 6 percent decline. The real highlight though is a tale of two categories, PCs and TVs. PC sales were as strong as we have ever seen, with notebook unit volume up almost 70 percent and desktops (yes, desktops !!!) up nearly 30 percent. TVs, on the other hand, were a drag on revenue growth despite a 30 percent increase in unit volume.
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On Monday NPD released consumer technology results to our weekly data clients for the third week of the holiday season and so far sales results are tracking at, or a little better than, our pre-holiday expectations. Prior to the holiday we expected sales dollars to fall between 0 and negative 5 percent for the holiday period. For the first two initial periods we reported on, November sales and Black Friday week sales, revenue has been slightly stronger. With November monthly sales rising less than 1 percent from 2008 due to the strength of sales early in the month, and Black Friday sales falling just 1.2 percent, the trend line has been favoring a closer to flat holiday than our worst case negative expectation.
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Those of us on the East Coast were buried this past weekend in a monumental December snowstorm leading some to fear that holiday sales would be interrupted. According to NPD’s Consumer Tracking Service, the regions impacted by the snow, New England and the Mid-Atlantic, accounted for 18 percent of sales for the first 10 months of the year. While this is a substantial amount of volume it’s not likely that a one or two day pause in holiday shopping will cause measurable impact on the final holiday sales volume, even when those two days are two of the busiest days holiday shopping days, the Saturday and Sunday before Christmas.
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NPD released November sales results today showing the best monthly performance year- to-date in 2009. Total revenue tracked through our Retail Tracking Service was flat with November 2008 and represented the first non-negative month of the year. That is the top-line story, but, the intricacies about how this happened (finally!!) are interesting as well.
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I once again have completed my annual Black Friday store observation trip throughout Northern Virginia. Usually I can walk away and say either this is going to be a good holiday season, or a bad one, but this year I have mixed emotions based on what I observed. Many were looking for Black Friday to give us a glimpse into the future of the holiday season and an indicator of where the U.S. economy is heading.
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As Windows 7 begins its assault on the consumer retail marketplace today, so far, despite a few questionable decisions, the marketing, merchandising, and retail preparation appear to be clicking on all cylinders. Since I’m not a product reviewer I can’t comment on how “insanely great” Windows 7 might be, but I can give Microsoft kudos for the preparation and first spate of advertising. Let’s look at 3 buckets.
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Microsoft released lots of interesting details today on Windows 7 release schedules and pricing. There were three main announcements: First, and one that is pretty good but that has already been widely reported, is that PC upgrades on Vista machines bought between now and the end of October would be free from Microsoft, with any cost (normally S&H) being charged by the PC OEM. This is within expectations and is the good for both the consumers and the OEMs. We should see a very minimal stall from the transition as these very low cost upgrades are offered to consumers. In addition, the excellent timing of the general availability of Win7 (between back-to-school and Black Friday) ensures that student buyers can’t wait until general availability to buy and holiday consumers are taken care of. All-in-all a big A+ for timing, pricing, and for ensuring that this will be the smoothest transition within the industry of any Windows OS upgrade yet.
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Commercial Technology | Stephen Baker, Vice President, Industry Analysis | 
January 28, 2010 1:00 pm | 
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