Direct channel overtakes commercial sales

Direct channel overtakes commercial sales

The US direct channel has shipped more PCs than the commercial channel for the first time ever in the third quarter of 1999, in a precedent that's likely to raise a few eyebrows locally.

Research released by International Data Corporation (IDC) this week found that in the US there was 29 per cent growth in PC shipments from a year ago, with the direct channel accounting for 31.5 per cent of all PCs shipped in Q3 '99, and the commercial channel having a 30 per cent shipment share.

IDC market analyst Logan Ringland said that in Australia, with vendors such as Dell Computer and Gateway doing reasonably well, we could a stronger a move towards the direct channel.

Ringland said in Australia, direct PC sales represent almost 33 per cent of the market for the financial year to Q3 '99, with the commercial channel representing 56 per cent of the market.

Commenting on the results of the US research, Joseph Rigoli, an analyst with IDC's Emerging Consumer and PC Channels research program, said that the commercial channel's decreasing market share did not comment necessarily on the profitability of resellers that made up this channel. "Commercial channel business models are changing as these resellers transition to service agencies providing value-added services on PCs purchased directly from manufacturers," Rigoli said.

IDC also found that in the US during the first three quarters of 1998 the direct channel accounted for 31 per cent of all PCs shipped, compared with 36 per cent for the commercial channel. For the same time frame in 1999, the direct and commercial channels came in at 31.5 per cent and 31.8 per cent respectively.

The retail channel achieved a 33 per cent increase in shipments in Q3 '99 from the year-ago period. IDC also tracked direct Internet sales for the first time during the Q3 '99, finding that only five per cent of US PCs were sold via the Internet. IDC defined this channel as comprising all vendor sales that are completed and paid for electronically via an Internet interface with end users.

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