Spotcheck:  Who's Online - March 1999

Around a third of U.S. households are expected to be online by the end of 1999 and
nearly two-thirds by December 2003 with the availability of
cheaper computers enabling more people to gain access to the Web, a
study released this week

With sub-$600 personal computers representing nearly a fifth of all U.S.
PC retail sales, and
sub-$300 machines now a reality, more households can afford the devices
they need to get online.

Around 25 percent of U.S. households currently have access to the
Internet, according to the report
by Boston-based research firm the Yankee Group, a unit of Primark Corp.
(NYSE:PMK - news).

That compares to 5 percent of households in all Western European
countries. Internet access by
European consumers is expected to rise to around 17 percent by the end
of 2002, Yankee Group
studies show.

U.S. consumers will spend $56 billion on Internet access services over
the next five years, and the
market will grow 21 percent a year during the same period, the report

The Internet is now the No. 1 use for home computers. The Yankee Group
survey found 46 percent
of U.S. households with PCs cite the Internet as the primary use for
their computers, followed by
home office use with 23 percent, and games and entertainment at 18

Around 45 percent of U.S. households have PCs.

Leading the low-priced PC revolution have been a number of upstart PC
makers, including
eMachines Inc., a joint venture of two South Korean companies - Trigem
Computer Inc. and
Korean Data Systems, and Microworkz Computer Corp.

Mainstream computer makers such as Packard Bell NEC are also entering
the sub-$600 market.

In February, retail sales of sub-$600 PCs were up sixfold from a year
earlier, according to a report
by Reston, Va. research firm PC Data. Retail sales made up only 23
percent of the 29 million
desktop PCs sold in the United States in 1998 but pricing in the
consumer market affects the whole

Web access providers wishing to profit from increasing computer
ownership should sign up PC
neophytes, the Yankee Group said.

The Boston firm's survey found America Online Inc. (NYSE:AOL - news) had
a 57 percent share
of the U.S. consumer market but showed plenty of room for Internet
service firms to carve out the
number two spot.