Researchers See Surge in Demand for HP Computers

Sales of desktop computers made by Hewlett-Packard (NYSE: HPQ) have exhibited a recent year-over-year surge, according to a report released this week by ChangeWave Research, of Rockville, Md.

ChangeWave -- which conducts periodic surveys of an "alliance" of some 5,000 business. technology and medical professionals -- reported that 20 percent of the respondents in its August purchasing survey bought an HP desktop in the last 90 days. That compares to nine percent in the firm's June poll.

Moreover, demand for HP hardware is expected to remain high over the next 90 days, the report's writers predicted. They found that 21 percent of alliance members said they'd be buying an HP desktop in the next 90 days. That's a 10 percent increase over findings in the June survey, when 11 percent of respondents disclosed their intentions to buy HP.

No Longer 'a Punching Bag'

The growing popularity of HP among alliance members -- who, according to ChangeWave, "spend their everyday lives working on the frontline of technological change" -- indicates an improved perception of the company among consumers, maintained the research firm's Founder and Chief Investment Officer Tobin Smith.

"For the last three years or so, HP has been a non-entity," he told TechNewsWorld. "It's been a punching bag.

"It hasn't had a corporate strategy," he continued. "It didn't know what business it was going to be in, and it didn't have the right product at the right price."

That's recently changed, Smith maintained, with HP offering attractive products in the US$1,000 to $1,500 price range.

Catching New Retail Wave

In addition, he said, "It's done some pretty aggressive marketing in the last six months or so."

Moreover, HP sales have been helped by an influx of retail-oriented consumers entering the market, he asserted.

"We're getting to the stage where buyers want more hands-on retail experience," he said. "They want to touch and feel what they're buying."

That tactile trend is hurting Dell (Nasdaq: DELL), he averred, which doesn't have much of a presence in the retail channel. According to the NPD Group in Port Washington, N.Y., HP has 57.2 percent of the retail market in desktops and 39.1 percent of the market in notebooks.

Dell Still King

Nevertheless, Dell remains a strong presence in the market, as ChangeWave's latest survey findings indicate. During the polling period, 48 percent of desktop purchases -- up by three points over June -- and 43 percent of notebook buys -- down a point from June -- by alliance members were Dell boxes.

The Round Rock, Texas, company will dominate alliance purchasing over the next 90 days, too, surveyors wrote. During that period, they said, 55 percent of alliance members planned to buy a Dell desktop -- up three percent from June -- and 51 percent planned to buy a Dell notebook -- a one percent slip from June.

If HP sales are beginning to surge, it hasn't translated in any dramatic shifts in market share yet. "In the last couple of months, things have been relatively stable," NPD's Stephen Baker, an analyst told TechNewsWorld.

"There's nothing in August, in terms of market share, that's significantly different from previous months," he noted.

Best August Ever

"There isn't a lot of room for anyone to pick up a lot of momentum in the PC space," he said. "Most of what we saw in back-to-school was really about price. Everyone was pretty aggressive about notebook prices."

He noted that August was a record month for retail sales of notebook computers. "We tracked more sales of notebooks in August than we had ever tracked before in any month in 10 years," he said.

Notebook prices, before rebates, averaged $1,099, he observed, and during the holiday season, NPD expects that average to sink below $1,000.

$250 Desktops

"You'll see a few times during Christmas time $399 notebooks," Baker predicted.

Although there are expectations that notebook sales will start to eat into desktop business, that hasn't been the case, he said. "The desktop business continues to chug along with sales increasing six or seven percent a month this year," he noted.

With average desktop prices around $675, there isn't much wiggle room for them during the holidays, he observed, but he predicted there will be a lot more $250 desktop specials this year than in the past.