It wasn`t hard for personal computer companies to come up smelling like roses in 1984. But in 1985, when some of the previous year`s most fragrant performers needed a squirt of air freshener for their annual reports, Houston- based Compaq Computer Corp. was still smelling sweet.
The last year was one of markedly slower growth for the computer industry as a whole, which found itself in a far-reaching slump that extended from the home market up through mainframes.
According to InfoCorp, a Cupertino, Calif.-based research firm that tracks retail sales of personal computers, unit sales for personal computers in 1985 were down 14 percent from 1984.
That explains some of the sighs coming out of Apple Computer Inc. in Cupertino and the frowns from International Business Machines Corp. in Armonk, N.Y., but it doesn`t account for all the smiles in Houston.
”Compaq acts like it didn`t know there was a slump going on,” said Jan Lewis, president of Palo Alto Research Group, a California-based market research group.
”Whenever we do focus-group surveys to find out how users feel about a company, the same word keeps emerging in relation to Compaq–security,” she said.
At Compaq, sales were up 53 percent over 1984, and earnings up 106 percent. According to InfoCorp., Compaq captured 9 percent of the market in unit sales in personal computers in 1985, up from 6 percent a year earlier, with unit sales increasing to 177.2 million from 125.4 million in 1984.
Compared to some of the superstars of the industry, Compaq, still only about a quarter the size of Apple in terms of revenues, didn`t just have a good year, it had a phenomenal one.
At Apple Computer Inc., sales for the fiscal year 1985, ending Sept. 30, were up about 26 percent, but earnings dropped more than 4 percent. According to InfoCorp, Apple`s market share in retail sales fell to 37 percent from 46 percent, and units sold fell to 721.2 million from slightly more than a billion.
In its first quarter of 1986, the crucial Christmas period ended Dec. 31, 1985, Apple showed higher earnings, but on almost 24 percent lower sales. The somewhat bruised one-time star of the micro industry admits its bottom line benefited from its fat-trimming during the last year.
At IBM, sales were up about 9 percent for the year, but earnings were slightly lower. Of course IBM`s sales and earnings figures represent a lot more than PCs. InfoCorp`s study showed unit sales at retail level for IBM PC products essentially flat–at 574.9 million from 573.2 million, which did, however, increase Big Blue`s market share in retail sales to 29 percent from 25 percent.
