Changewave Research: Consumer PC Purchasing& Ipods

ChangeWave Research: Consumer PC Purchasing& iPods

ChangeWave Research Report:

Consumer PC Purchasing – And A Look AtiPods

Dell PC Market Share Takes a Hit – HP Hangs in;

Apple PC Saleson Rise andiPods Look Very Strong

Overview

During the week of October 24–28, 2005, we askedAlliance members about their PC and iPod purchasing habits. A total of 2,040 members participated in the survey.

Bottom Line: The survey results showPC demand remains stable among consumers.But while Dell retains the overall market share lead, its desktop purchases have fallen by 9-points andLaptops by 1-pointsince our August survey. Moreover, the next 90 days look even worse for Dell – planned desktop purchases are down13-pts; laptops down 8-pts.

Things have been somewhat brighter for Hewlett-Packard. Over the past 90 days HP has gained market share in both desktops (up 4-pts) and laptops (up 1-pt). Over the coming 90 days, however, HPs situation appearsmixed. Only 10% of respondents say they plan onbuying an HP desktop – down 11-points from August. But on a positive note, 21% say they plan on purchasing an HP laptop – up 2-points from previously.

Apple’scomputersales over the past 90 days appear weaker thanexpected – with desktop purchases down 2-pts and laptops down 4-pts compared to the previous survey. But Apple looks muchstronger going forward – planned desktop purchases are up 2-points; laptops up 4-points; and iPods up an extraordinary 7-points. For iPods, that’s a 50% gain in planned purchases since our August survey.

(A) Computer Purchases – Past 90 Days

PC Purchases Up Slightly. A total of 21% of respondents say they bought a computer within the last 90 days, 1-point more than in our August 2005 survey.

Hewlett-Packard PC Purchases Continue to Rise. HP hasadded to the surge in PC purchases we first reported in our August survey. Nearly one-in-four respondents (24%) havepurchased an HP desktop in the past 90 days – 4-points higher than in the previous survey. Another 17% bought an HP laptop – up 1-point from previously.

Apple PC Demand Somewhat Weaker. Apple’s share of desktop purchases (5%) was down 2-pts from August, and their share of laptop purchases (5%) was down 4-pts.

Dell PC Market Share Falls. Though Dell still holds the overall PC market share lead among Alliance consumers, itsdesktop purchases (39%) have fallen 9-points since our August survey. Laptop purchases (42%) were down by 1-point.

(B) Planned Computer Purchases – Next 90 Days

Planned PC Purchases Down Slightly. One-in-five respondents (20%) plan on buying a computer in the next 90 days, 1-point lower than in our August 2005 survey.

Dell Takes Huge Hit. Once again, althoughDell holds the overall market share lead in planned PC purchases for the next 90 days, its planned desktops purchases (42%) are down a whopping 13-points, while laptops (43%) are down 8-points.

Mixed Results for HP. Planned desktop purchases have also fallen for HP. Just10% of respondents say they plan on buying an HP desktop over the next 90 days,down 11-points from the huge surge we saw in our August survey. But on a brighter note, 21% say they now plan onpurchasing an HP laptop – up 2-points from previously.
MacPlanned Purchases Jump. Demand for Apple desktops and laptops over the next 90 days has surged, with 11% saying they’ll buy an Apple desktop (up 2-points from Aug) and 16% saying they’ll buy an Apple laptop (up 4-points from previously).

(C) Apple iPods

iPods Rule the World for the Holidays. Planned purchases of the Apple iPod look exceptionally strong going forward, with 14% saying they plan on purchasing some type of iPod over the next 90 days – double the 7% seen in our previous survey.

Current iPod Ownership AlsoUp.Total iPod ownership among Alliance respondents has risen to 22% – 4-points higher than in our August 2005 Survey.

New Apple iPod With Video Capability. We also asked respondents how likely it is that they or someone in their household will purchase one of the new Apple iPods with video capability. A total of 12% said it is likely that they or someone in their household will purchase an iPod with video capability over the next 90 days.

Summary of Key Findings

The ChangeWave Alliance is a group of 6,000 highly qualified business, technology, and medical professionals in leading companies of select industries—credentialed professionals who spend their everyday lives working on the frontline of technological change. ChangeWave surveys its Alliance members on a range of business and investment research and intelligence topics, collects feedback from them electronically, and converts the information into proprietary quantitative and qualitative reports.

Helping You Profit From A Rapidly Changing World ™

Table of Contents

Summary of Key Findings...... 2

The Findings...... 4

(A)Computer Purchases –Past 90 Days ...... 4

(B)Planned Computer Purchases –Next 90 Days...... 5

ChangeWave Research Methodology...... 9

About ChangeWave Research...... 10

I. The Findings

Introduction

During the week of October 24–28, 2005, we askedAlliance members about their PC and iPod purchasing habits. A total of 2,040 members participated in the survey.

(A) Computer Purchases – Past 90 Days

(1)Did you buy a computer within the last 90 days? (n = 992)

Current
Survey
Oct ‘05 / Previous
Survey
Aug ‘05 / Previous
Survey
Jun ‘05 / Previous
Survey
Mar ‘05
Yes / 21% / 20% / 20% / 19%
No / 77% / 79% / 79% / 80%

PC Purchases Up Slightly. A total of 21% of respondents say they bought a computer within the last 90 days, 1-point more than in our August 2005 survey.

(2A) Question Asked: Who is the manufacturer of the desktop you bought over the last 90 days? (Check All That Apply)(n=118)

Current
Survey
Oct ‘05 / Previous
Survey
Aug ‘05 / Previous
Survey
Jun ‘05 / Previous
Survey
Mar ‘05
Dell - Desktop Computer / 39% / 48% / 51% / 51%
HP/Compaq - Desktop Computer / 24% / 20% / 9% / 12%
Apple - Desktop Computer / 5% / 7% / 7% / 2%
Sony - Desktop Computer / 4% / 1% / 4% / 5%
Lenovo (formerly IBM) - Desktop Computer / 2% / 1% / NA / NA
Other - Desktop Computer / 26% / 27% / 29% / 32%
Don't Know / 0% / 1% / 2% / 0%

(2B) Question Asked: Who is the manufacturer of the laptop you bought over the last 90 days? (Check All That Apply)(n=116)

Current
Survey
Oct ‘05 / Previous
Survey
Aug ‘05 / Previous
Survey
Jun ‘05 / Previous
Survey
Mar ‘05
Dell - Laptop Computer / 42% / 43% / 42% / 34%
HP/Compaq - Laptop Computer / 17% / 16% / 13% / 12%
Apple - Laptop Computer / 5% / 9% / 12% / 6%
Sony - Laptop Computer / 8% / 8% / 3% / 9%
Toshiba - Laptop Computer / 14% / 12% / 10% / 14%
Lenovo (formerly IBM) - Laptop Computer / 8% / 6% / 6% / 7%
Other - Laptop Computer / 9% / 10% / 12% / 12%
Don't Know / 0% / 1% / 0% / 0%

Hewlett-Packard PC Purchases Continue to Rise. HP has added to the surge in PC purchases we first reported in our August survey. Nearly one-in-four respondents (24%) have purchased an HP desktop in the past 90 days – 4-points higher than in the previous survey. Another 17% bought an HP laptop – up 1-point from previously.

Apple PC Demand Appears Weaker. Apple’s share of desktop purchases (5%) was down 2-pts from August, and their share of laptop purchases (5%) was down 4-pts.

Dell PC Market Share Falls. Though Dell still retains the overall PC market share lead among Alliance consumers, its desktop purchases (39%) have fallen 9-points since our August survey. Laptop purchases (42%) were down by 1-point.

(B) Planned Computer Purchases – Next 90 Days

(3) Question Asked: Will you be buying a computer in the next 90 days? (n= 992)

Current
Survey
Oct ‘05 / Previous
Survey
Aug ‘05 / Previous
Survey
Jun ‘05 / Previous
Survey
Mar ‘05
Yes / 20% / 21% / 19% / 20%
No / 78% / 77% / 80% / 79%

Planned PC Purchases Down Slightly. One-in-five respondents (20%) plan on buying a computer in the next 90 days, 1-point lower than in our August 2005 survey.

(4A) Question Asked: Who is the manufacturer of the desktop you plan on buying over the next 90 days? (Check All That Apply) (n=111)

Current
Survey
Oct ‘05 / Previous
Survey
Aug ‘05 / Previous
Survey
Jun ‘05 / Previous
Survey
Mar ‘05 / Previous
Survey
Jan ‘05
Dell - Desktop Computer / 42% / 55% / 52% / 44% / 52%
HP/Compaq - Desktop Computer / 10% / 21% / 11% / 6% / 9%
Apple - Desktop Computer / 11% / 9% / 13% / 14% / 13%
Sony - Desktop Computer / 5% / 9% / 7% / 4% / NA
Lenovo (formerly IBM) - Desktop Computer / 2% / 1% / NA / NA / NA
Other - Desktop Computer / 23% / 18% / 17% / 19% / 21%
Don't Know / 20% / 17% / 14% / 17% / 13%

(4B) Question Asked: Who is the manufacturer of the laptop you plan on buying over the next 90 days? (Check All That Apply)(n=120)

Current
Survey
Oct ‘05 / Previous
Survey
Aug ‘05 / Previous
Survey
Jun ‘05 / Previous
Survey
Mar ‘05 / Previous
Survey
Jan ‘05
Dell - Laptop Computer / 43% / 51% / 52% / 46% / 45%
HP/Compaq - Laptop Computer / 21% / 19% / 12% / 6% / 14%
Apple - Laptop Computer / 16% / 12% / 9% / 14% / 12%
Sony - Laptop Computer / 5% / 10% / 9% / 6% / NA
Toshiba - Laptop Computer / 9% / 14% / 9% / 10% / 6%
Lenovo (formerly IBM) - Laptop Computer / 10% / 9% / 12% / 7% / 6%
Other - Laptop Computer / 8% / 9% / 8% / 6% / 10%
Don't Know / 16% / 13% / 16% / 19% / 14%

Dell Takes Huge Hit. Once again, althoughDell holds the overall market share lead in planned PC purchases for the next 90 days, its planned desktops purchases (42%) are down a whopping 13-points, while laptops (43%) are down 8-points.

Mixed Results for HP. Planned desktop purchases have also fallen for HP. Just 10% of respondents say they plan on buying an HP desktop over the next 90 days, down 11-points from the huge surge we saw in our August survey. But on a brighter note, 21% say they now plan on purchasing an HP laptop – up 2-points from previously.

Mac Planned Purchases Jump. Demand for Apple desktops and laptops over the next 90 days has surged, with 11% saying they’ll buy an Apple desktop (up 2-points from Aug) and 16% saying they’ll buy an Apple laptop (up 4-points from previously).

(5) Question Asked: (FOR THOSE BUYING AN APPLE COMPUTER IN THE NEXT 90 DAYS) Have you purchased an Apple computer in the past, or are you purchasing an Apple computer for the first time? (n=21)

Current
Survey
Oct ‘05 / Previous
Survey
Aug ‘05
I have purchased an Apple computer in the past / NA / 54%
I have purchased an Apple computer within the past 10 years / 63% / NA
I have purchased an Apple computer, but more than 10 years ago / 7% / NA
I am purchasing an Apple computer for the first time / 30% / 41%
Not Applicable / 0% / 2%
Don't Know / 0% / 2%

New Apple Purchasers. Currently, 30% of respondents planning to purchase an Apple computer in the next 90 days say they are purchasing an Apple for the first time. The other 70% say they have owned an Apple computer in the past.

(6) Question Asked: Do you currently own an Apple iPod? (Check All That Apply) (n=2040)

Current
Survey
Oct ‘05 / Previous
Survey
Aug ‘05 / Previous
Survey
Jun ‘05 / Previous
Survey
Mar ‘05
Yes, Apple iPod / 10% / 9% / 10% / 8%
Yes, Apple iPod (With Video Capability) / 0% / NA / NA / NA
Yes, Apple iPod Nano / 2% / NA / NA / NA
Yes, Apple iPod Mini / 6% / 5% / 5% / 2%
Yes, Apple iPod Shuffle / 3% / 3% / 1% / 1%
Yes, Apple iPod Photo / 1% / 1% / 1% / 0%
No / 79% / 82% / 83% / 88%

Current iPod Ownership Up. Total iPod ownership among Alliance respondents has risen to 22% – 4-points higher than in our August 2005 Survey.

(7) Question Asked: Do you plan on purchasing an Apple iPod in the next 90 days? (Check All That Apply) (n=2040)

Current
Survey
Oct ‘05 / Previous
Survey
Aug ‘05 / Previous
Survey
Jun ‘05 / Previous
Survey
Mar ‘05
Yes, Apple iPod / 3% / 3% / 2% / 3%
Yes, Apple iPod (With Video Capability) / 3% / NA / NA / NA
Yes, Apple iPod Nano / 5% / NA / NA / NA
Yes, Apple iPod Mini / 2% / 2% / 2% / 2%
Yes, Apple iPod Shuffle / 1% / 1% / 0% / 1%
Yes, Apple iPod Photo / 0% / 1% / 1% / 1%
No / 75% / 84% / 84% / 83%
Don't Know / 11% / 6% / 9% / 9%

iPods Rule the World for the Holidays. Planned purchases of the Apple iPod look exceptionally strong going forward, with 14% saying they plan on purchasing some type of iPod over the next 90 days – double the 7% seen in our previous survey.

(8) Question Asked: Apple recently released a new iPod digital music player with video capability. The new iPod contains a 2.5 inch color screen on which music videos, television shows, and photos can be viewed. It is available in both 30GB ($299) and 60GB ($399) versions. How likely is it that you or someone in your household will purchase one of the new Apple iPods with video capability within the next 90 days (including the Holiday Spending season)? (n=2040)

Very Likely / 4%
Somewhat Likely / 8%
Unlikely / 83%
Don't Know / 5%

New Apple iPod With Video Capability. We also asked respondents how likely it is that they or someone in their household will purchase one of the new Apple iPods with video capability. A total of 12% said it is likely that they or someone in their household will purchase an iPod with video capability over the next 90 days.

(8A) Question Asked: What is the most important reason why or why not?

Members Who Said “Very/Somewhat Likely”(n=132)

Kids Want/Trendy / 24%
Versatility/Usability/Design / 17%
Video Capabilities / 12%
Replacement/Upgrade/Addition / 10%
Gift / 9%
Size / 6%
Value / 5%
Storage / 3%
Don’t Have One Yet / 2%
Unsure / 5%
Other / 5%

Members Who Said “Unlikely”(n = 1155)

Have No Need/Interest/Use for One / 61%
Too Expensive / 14%
Screen Size is Too Small / 9%
Already Own a Comparable Device / 8%
Waiting for New Version/Better Content/Better Availability / 3%
Other / 5%

II. ChangeWave Research Methodology

This report presents the findings of a recent ChangeWave Alliance survey on consumer demand for desktops, laptops and iPods. The survey was conducted October 24-28, 2005 and a total of 2,040Alliance members participated.

The Alliance’s proprietary research and business intelligence gathering system is based upon the systematic gathering of valuable business and investment information directly over the Internet from accredited members.

ChangeWave surveys its Alliance members on a range of business and investment research and intelligence topics, collects feedback from them electronically, interprets and reconciles the information in a cohesive manner and converts the information into valuable quantitative and qualitative reports.

The Alliance has assembled its membership team from senior technology and business executives in leading companies of select industries. Nearly 3 out of every 5 members (58%) have advanced degrees (e.g., Master’s or Ph.D.) and 94% have at least a four-year bachelor’s degree.

The business and investment intelligence provided by the Alliance provides a real-time view of companies, technologies and business trends in key market sectors, along with an in-depth perspective of the macro economy – well in advance of other available sources.

III. About ChangeWave Research

ChangeWave Research, a subsidiary of Phillips Investment Resources, LLC, identifies and quantifies "change" in industries and companies through surveying a network of thousands of business executives and professionals working in more than 20 industries.

ChangeWave has a very unique asset in its 6,000-member Alliance. We have assembled our membership team from a broad cross section of more than 20 vertical markets such as telecom, semiconductors, data storage, and biotechnology, along with a wide range of professional disciplines including CIOs, IT managers and programmers, executive management, scientists, engineers and sales personnel.

The ChangeWave Alliance is composed of senior technology and business executives in leading companies - credentialed professionals who spend their everyday lives working on the frontline of technological change.

This proprietary research and business intelligence gathering system provides a real-time view of companies, technologies and business trends in key market sectors along with an in-depth perspective of the macro economy - well in advance of other available sources. ChangeWave surveys its 6,000Alliance members on a wide range of investment research topics and converts the findings into valuable investment and business intelligence reports. ChangeWave delivers its products and services on the Web at

ChangeWave Research does not make any warranties, express or implied, as to results to be obtained from using the information in this report. Investors should obtain individual financial advice based on their own particular circumstances before making any investment decisions based upon information in this report.

For More Information:

ChangeWave ResearchTelephone: 301-279-4200

9420 Key West AvenueFax: 301-610-5206

Rockville, MD20850

Helping You Profit From A Rapidly Changing World ™

This information is from ChangeWave Research, LLC and contains confidential business information.