Discount computer peripheral

Not too long ago, the peripherals department at most mass merchants consisted of a couple of dot matrix printers and maybe a lower-end laser printer for variety.

No more. As consumers have become more comfortable with their home computers, demand has grown for consumer versions of the kind of peripheral products that have been the stock in trade of the computer reseller for years.

The past year has already seen an influx of new ready-for-retail products, led by the ink or bubble jet printers from HP and Canon, which offer consumers fast color printing at home at a reasonable (under $300) price point. Superfast modems for internet cruisers, CD-ROM upgrade kits, personal photo copiers, in-board telephone systems and high-powered video boards are all appearing on-shelf at major mass merchants like Wal-Mart and Sears.

Many of these products offer retailers a major benefit apart from profit from the initial sale: They require relatively expensive and high-margin supplies on a regular basis, and many also require additional sales of upgraded accessories like speakers and software.

Within the past month or two, several major contenders for mass merchant shelves have made an appearance.

The Zip Drive from Iomega Corp. debuted at Computer City in April and sold out chainwide in a single day. "It's been amazing," retail chain president Alan Bush said. The drive, which was developed based on a new Fuji 100-megabyte diskette, addresses several consumer needs, including the filled-up hard drive. As users enter their second or third year of home computing, their hard drives, generally in the 100-megabyte area, tend to fill up, requiring either a purge of files (leading to record sales for software solutions like Uninstall-It) or the acquisition of a larger, expensive, hard drive upgrade.

According to Iomega's Michael Collins, director of channels and marketing, Zip Drive offers a more consumer-friendly solution. "It's inexpensive ($199), portable and infinitely upgradeable," he said. The 100-megabyte diskettes allow users to transfer large amounts of data from office to home and back, to download data-intensive files from on-line sources without clogging up the hard drive and to let kids play games on a home office computer without endangering important files stored on the fixed drive.

More important, from a retailer's point of view, is the razor/razor blades equation the Zip Drive stimulates, Collins said. "The disks (at about $19.95 each) deliver high margins and steady repeat business," he noted.

At about the same time, a new approach to scanning, again aimed directly at the consumer, has debuted at computer and consumer electronics superstores. Visioneer's PaperPort, supplemented with DocuMagix software, allows users to quickly scan any document into their computer, then file it for easy retrieval in a "virtual filing cabinet." "This has to be the most underrated product on the market," Computer City's Bush noted, adding that it has sold "really well" since the Windows version shipped in March.

According to Visioneer spokeswoman Marcella Wucher, PaperPort does a lot more than just clear your desk of paper clutter. "It works with your existing fax modem and Email systems, so that you can not only store data, but use it in many new ways."

Added DocuMagix president Al Sisto, the system "is better than a traditional filing cabinet. A key word search pulls up your document instantly, or you can browse through various folders with a few keystrokes, print out what you need and refile in a few seconds." Sisto scans in his expense report forms and receipts, hooks them together with a "virtual staple," then faxes them to his accounting department. He also uses PaperPort to download files from the internet, then prints them out.

With about 100% of computers on-shelf at retail already containing CD-ROM drives, the multimedia upgrade market is dead, light? Wrong, said Ken Wirt, vp of marketing for video board and upgrade marketer Diamond Multimedia. Double-spin systems may have a reduced market, but with recent price cuts, quad-spin is just coming into its own, he said. And when that cools off, there will be even faster drives, multi-disc changers and recordable CD drives to keep the market growing.

Diamond entered the market less than a year ago, and according to Wirt, is already a strong third in the supplier hierarchy, primarily because it was the first to abandon double-spin to concentrate on quad-spin.

Also," he said, "we've concentrated on high-quality software titles with all of our kits. We have Magic Carpet, which just came out a couple of months ago, Interplay's Cyberia, which is brand new, Myst, Rebel Assault, Compton's 1995 Encyclopedia and Where in the World is Carmen Sandiego, among others."

Diamond markets the kits to appeal to various market segments. The SOHO 6000, for instance, includes business and financial software, while the Educator 3000 is aimed at young children with Living Books' Arthur's Birthday and Broderbund's Math Workshop.

Of course, market leaders Creative Labs, Media-Vision and Turtle Beach have also introduced quad-spin kits, with bare bones bundles starting at $249. As more titles start to require faster drives, and as consumers look to upgrade their sound systems, Wirt sees a thriving business resulting.