Jazzed Up Computers Attract Household Buyers

AMERICANS are taking the personal computer home in droves. And if traditionally they did so because Mom or Dad wanted to work at home, computermakers are having to deal with a new consumer force: children.

``You wouldn't believe how much leverage an 11-year-old can have,'' says Robert Corpuz, an industry analyst with Dataquest, a market researcher in San Jose, Calif. In some households, owning a home computer is becoming a status symbol. Mr. Corpuz says he even sees a ``keeping up with the Jones's'' mentality developing. The evidence is everywhere.

Computermakers are designing new machines that play games and make music - items especially attractive to children. New family-oriented PC magazines are popping up. Software companies are making PC versions of major arcade games.

They are doing so because the home computer market is growing strongly. Already, nearly 1 in 3 households in the United States has a home computer - most of them bought within the last two years, according to the Software Publishers Association in Washington. In a few years, analysts estimate that one-half of US households will have one.

The prime motivation for getting a PC is still work-related, says David Rheins, an analyst with the International Data Corporation. But home entertainment and education factors are ``increasingly important,'' he adds. Once the machines come home, moreover, families are finding many ways to use them. According to one estimate, about three-fourths of home PCs are used for playing games; one-half are used for school work.

Homes represent a huge opportunity for the computer industry. Having saturated the business market, manufacturers are eager to exploit new territory. Roughly speaking, the US has as many households as it has private-sector business establishments.

Some manufacturers, notably Apple Computer, early recognized the importance of the home market. The company's Performa models have done well. Others are catching up.

Packard Bell, already a leading player in the home market, has redesigned its PC, including built-in speakers, color-coded connectors for easy hookup, and even a choice of color-accented panels. Gateway 2000 has introduced its own sound- and game-capable models called the ``Family PC.'' Compaq Computer has scored a hit with its home-targeted Presario models.

One big reason families are buying is that computer prices have come down dramatically. Since Compaq inaugurated the latest round of price cuts in mid-1992, it has reduced prices by one-third. Others have followed, making even top-of-the-line models affordable to families. In June, Dell Computer began offering a PC based on the latest Pentium chip for $1,999.

THESE trends are exploding the myth that home computers are old, underpowered castoffs from the office. In fact, when Intel first introduced its speedy Pentium microprocessors, most of them went into home computers rather than office machines. The company has aggressively slashed prices on the Pentium.

``Home wants price but home also wants a much richer machine than even the corporate [user],'' says Vin Dham, general manager of Intel's Pentium processor division. That means machines capable of handling sound and playing CD-ROMs, the optical computer disks similar to compact disks. Spending on this category of computing, usually referred to as multimedia, is expected to soar for the rest of the decade.

The reason home buyers are choosing speedy processors is not necessarily that they need the power; they don't want their machines to become outdated in a few years, Mr. Dham says. Those professionals who do bring home high-powered machines are beginning to complain at the office. Their new home computers now outpace their machines at work.

As home-computing becomes more broadly accepted, it is likely to bring in new players and spur unusual alliances. Compaq, for example, has announced ventures with KidSoft, which makes educational software, and Binney & Smith, which sells Crayola crayons and art software. Further down the line, PC companies like IBM, Hewlett-Packard, and Apple are developing devices that would sit on the top of television sets, allowing viewers to communicate through their TVs.

Although the industry is experiencing a summer slowdown in sales, the home market is expected to pick up later this year.

``We really believe that the Pentium box could very well be the Christmas box this year,'' Corpuz says.

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