New consumer models

IBM and Compaq--both major presences at retail stores--are also working feverishly to sell more directly. This week IBM announced new consumer models and said that one of its consumer PC lines will no longer be sold at retail outlets. "There_s a large segment of the population that will now buy online," said Mark Del Tufo, a manager at IBM_s Aptiva group. Though Compaq is not abandoning retail, it has significantly increased direct sales over the Web, said Bob Brewer, Compaq_s director of sales and marketing for consumer-direct and retail configure-to-order. In addition, the company depends more on 9,300 retail kiosks, where customers order custom-configured systems for delivery to the store or their home. Some models, such as the Presario 5700T and 5700N, which come with Intel_s newest chips, are only available built-to-order at retail kiosks or directly from Compaq. Brewer estimated that this side of Compaq_s consumer business is growing fivefold year over year. Compaq is also relying more on Radio Shack for retail sales after replacing IBM early last year. Another factor contributing to the distress of superstores is the "free" PC movement. "Retailers are more susceptible to losing sales through other channels than ever before," according to Allison Boswell of Allison Boswell Consulting. "With the offering of free PCs and new competition through Internet e-tailers, the environment is highly competitive."