Post GST PC sales plummet
- 27 September, 2000 12:37
Last week ARN covered how smaller retailers were feeling the effects of a drop in PC sales especially in the SOHO and consumer markets; this week analysts are confirming reports that the combined force of the Olympics and the implementation of the GST is placing inordinate pressures on the PC market.
Analysts agree: PC sales are down despite predictions that sales would be buoyant as prices dropped in post GST Australia.
Andy Woo, an analyst with Gartner, described the retail sector as sluggish and confirmed that the expected jump in sales post GST never eventuated.
"I think a lot of people were expecting sales increases because of the fall in price on hardware. However, this was virtually cancelled out by the GST on software because most of these products are bundled," Woo said.
Woo also commented that the market remained flat despite the extension of the government's GST start-up pack to October.
Ultimately, Woo puts much of the concern being expressed by the retail sector down to exaggerated expectations of the post-GST market and does not believe that we are witnessing the beginning of a long-term downward trend.
"Retailers were expecting things to improve dramatically after the GST and that just didn't happen. Things will pick up again through the end of Q3 as end users begin to make up for lost time. It is not only the Olympics, overall economic growth has slowed in every sector and the PC market is reflecting this," Woo said.
According to Inform analyst Chris Herbert, not only are PC sales falling but sales of PC peripherals, such as printers, are also taking a beating. A recent Inform report showing lower than expected July figures dashed early enthusiasm for a rise in printer sales post GST. Recent figures attained through Inform's channel monitoring service report a decline in sales of 19 per cent on June.
As with other analysts, Inform is blaming the poor results on the Olympics and the introduction of the GST, however, Herbert points out that July is traditionally a slow period.
"July is always a slow month, but this year the decline was not anticipated; sales expectations were more optimistic than usual due to the GST," Herbert said.
According to Inform figures, PC sales fell 24 per cent in July, with monitor and printer sales falling by 12 and 10 per cent respectively.
Herbert believes that the sales and price cuts offered in the run up to the introduction of the GST have created an uneven market and upset the normal sales patterns.
"Retrospectively the price reductions were overkill and did nothing more than lower the value of the market, create uneven demand and deplete stockpiles," Herbert said.