eMachines Becomes Fourth Largest Desktop PC Maker In U.S.

eMachines, Inc., the creator of the sub-$600 PC market segment with its $399, $499 and $599 eTower computers, announced that it has become the fastest growing supplier of personal computers in history. In less than four full months of sales, the company has achieved the number four market share position in US retail desktop PC sales.

PC Data's February 1999 market share report shows eMachines with a 9.9% retail desktop share, taking over the position previously held by Packard-Bell, and less than 1% point behind IBM which presently is at number three with a 10.7% share.

The January 1999 Ziff-Davis InfoBeads report listed eMachines in the number five retail desktop PC position with a 7.1% market share ousting Apple Computer. In December 1998, eMachines attained the number six slot with a 5.9% share in its first full month of sales.

"With our focus on the sub-$600 PC market segment, outstanding product quality and support, and mass market retail distribution, eMachines is demonstrating that this new level of affordability is leading the low-price PC evolution and opening up the market to numerous first-time PC buyers," stated Stephen A. Dukker, President and CEO of eMachines, Inc. "These independent research statistics validate that eMachines has become a tier-one branded PC vendor in record time."

Data from eTower sales in Q1'99 continued to verify eMachines' market momentum in driving the low price PC evolution. eMachines shipped approximately 300,000 eTower PCs in the first quarter of 1999, representing an increase from the over 150,000 units shipped in Q4'98. In Q2'99, the company will increase production of its eTower shipments to well over 400,000 units.

In Q1'99, eMachines continued to report a dramatically low return rate of under 4%, less than half the industry average, which indicates not only superb product and support quality, but that people are more comfortable with the purchase of a PC at the eTower's low price points. Supporting eMachines' mission to expand the market with new PC customers, approximately 51% of Q1'99 eTower sales through consumer electronics retailers were to first-time PC buyers, compared to industry figures that were slightly above 25% during 1997 and most of 1998. These new 'first-time' buyers reported annual household incomes at 69% between $20,000 and $34,000, and 31% between $35,000 and $49,000. This is substantially below the $50,000+ household income levels reported by PC owners in 1997 and 1998 surveys.

Customer data also shows that eMachines is expanding the market for multiple PC ownership in the home. For consumers who already own a computer, the average number of PCs in the home increased to approximately 2.2 after their eTower purchase. Continuing eMachines' powerful "word of mouth" trend, 32% of eMachines customers across all sales channels said they heard about eMachines from friends and associates, indicating that they are recommending the company's eTower PC.