Computer Industry Sales Brisk but Some Blips Ahead on Screen

Article excerpt

IT'S been two decades since the global personal computer revolution was launched from from a California garage.

Today, 2 out of every 3 American households with children and an income greater than $50,000 have a personal computer. Pentium chips and Windows 95 are as much a part of the consumer lexicon as Egg McMuffins and Levi's. And computer forecasters say PC sales worldwide will overtake sales of television sets before 2000.

But for all the hoopla and Las Vegas glitz that surrounds this week's annual gathering of the industry, known as COMDEX, there are hints that the traditional double-digit growth of personal computers may soon be slowing.

The Internet is being flagged by some as a potential threat. Others say the dizzying pace of change is alienating some consumers. "I tend to buy the latest, fastest, and greatest system and programs out there," writes David Smith on the CompuServe on-line service. "And I am almost getting a little tired of the changeover and new learning required to keep up."

For the moment, though, business is booming for hardware and software companies alike. Manufacturers of computer chips are scrambling to build new chip factories. Spot shortages have cropped up in everything from computer batteries to video-display picture tubes. "Across the board, demand remains strong," says Tim Curran, manager of Panasonic's computer-products group in Secaucus, N.J.

Many manufacturers expect a strong Christmas season. Dataquest, a San Jose, Calif., research firm, forecasts a record 17 million PCs will be sold in the final three months of the year, up 21 percent over the same period last year. "The mood here is pretty upbeat," says COMDEX spokeswoman Sue Lonergan.

But the rosy predictions begin to fade beyond Christmas. For example: The red-hot market for home PCs is up an estimated 26 percent this year. But it should slow down to 15 percent or less, according to several analysts. Sales of drives for CD-ROMs, the optical discs large enough to store an encyclopedia, will jump an estimated 62 percent this year but only 25 percent next year, forecasts Freeman Associates, a Santa Barbara, Calif., management-consulting firm.

By 2000, the Semiconductor Industry Association estimates annual chip sales will double worldwide. But much of that growth depends on sales of personal computers.

Computer companies have targeted the home because that's where the opportunity lies. While most American businesses that need a computer have a computer, only 1 out of 3 American homes has one. …