Holiday Sales Roundup Reveals Industry Rebound

Despite poor economic conditions, the 2001 holiday season was a success, especially for high tech and online companies. The three biggest players in the online shopping business--AOL, Microsoft MSN, and Yahoo--continue to dominate, with each of the companies top rated or neck-and-neck in various categories. Meanwhile, eCommerce sites such as and eBay saw huge sales increases this month, thanks to resurgent PC sales and strong sales of video games, digital cameras, portable music players, and other electronic items.

Microsoft says that sales at its MSN sites rose 56 percent when compared to the previous holiday season, while Yahoo saw growth of 86 percent. MSN traffic was up 39 percent year-over-year, to 75 million users; Yahoo rose 31 percent to 72 million users and AOL remained in the top spot overall with 84 million users. Online shopping, overall, was up 73 percent, or $345 million, when compared with the year before.

Despite their expense, video games were the big draw this year. Sony's PlayStation 2 unit held its own against newcomers Microsoft Xbox and Nintendo Game Cube, with video game titles for that unit outselling those of its rivals. PS2 games held eight of the top 20 sales spots, and all of the top five. The best selling game was a violent racing simulation called Grand Theft Auto 3. Four of the top twenty games were for the Nintendo GameBoy Advance, and two were for the Game Cube. The Xbox had only one best seller, Halo. Interestingly, legacy video games systems like the heavily discounted Sega Dreamcast, the Nintendo N64, and the first generation PlayStation also sold quite well during the holidays.

One loser this season was Apple, whose new retail stores will post a loss, according to a filing with the Securities and Exchange Commission. Predictably, the company blames the "continued deterioration of the US economy and the after-effects of the events of September 11" for its problems, and says its retail operations will continue to posts losses throughout 2002. This is bad news for Apple, which has aped Microsoft's "digital hub" strategy by positioning the Macintosh as the center of an individual's digital life. Apple recently released an elegant, but expensive, portable music player and will reveal another, still-mysterious, digital media device next month.

Apple has bigger problems, however. The company saw sales of its Macintosh systems fall 33 percent year-over-year in fiscal 2001, a feat for which its executives were curiously rewarded. Apple's top four execs were given options for one million shares each, currently worth over $5 million to each, a huge increase over similar awards in the past. CEO Steve Jobs received just $1 in salary for 2001, but he owns 20 million shares, or 5.7 percent of the company, and was given a $90 million jet recently.

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