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Thursday, December 14, 2000
HP experiencing stagnant online sales this quarter

"...In rough holiday news for leading CD-RW manufacturer Hewlett-Packard, online industry sales haven't increased so far this quarter, according to data provided by OneChannel.net. Even worse for HP, competitor Plextor -- and other smaller manufacturers such as QPS and Yamaha -- have made substantial inroads into this market at HP's expense.

So far this year, two key manufacturers -- Hewlett Packard and Plextor -- have dominated the CD-RW drive category at market shares of 21.9 percent and 21.8 percent, respectively. In overall sales this year, HP leads Plextor in category sales (at OneChannel.net's affiliated online retailers) by a very slight margin, but HP has steadily lost considerable sales and market from quarter to quarter over the course of this year.

From Q2 to Q3, HP sales fell 13 percent from $4.5 million to $3.9 million. But over that same time frame, Plextor sales actually grew 109 percent, from $3.1 million to $6.5 million. More recently (from October 1 through December 2), Plextor's reported online market share has grown to more than twice that of HP, at 34 percent to 14 percent, respectively.

Indeed, Plextor has enjoyed vigorous growth. During Q3, the most prosperous quarter for online CD-RW Drive sales, Plextor achieved a 29.6 percent share (up 12.7 share points from Q2), while HP's share fell to 17.5 percent (down 6.6 share points from its Q2 share).

Plextor's gains were mostly attributable to the new PlexWriter 12/10/32A, which has faster write and rewrite speeds than previous models; consumers seem to have been willing to pay more for this enhanced capability (an average $254 per drive versus an industry average of $218 per drive).

Other key manufacturers include Sony, Yamaha, and QPS, with year-to-date online category market shares of 9.7%, 9.6%, and 9.0%, respectively. Looking at trended quarterly performance, market share for Yamaha and QPS steadily increased, while Sony's share softened slightly over time. In particular, QPS picked up considerably in both sales and share during Q2 and Q3. Perhaps even more striking, between October 1 and December 2, the company's market share was up sharply, to 15.2 percent..."

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