Show BUSINESS and lod till thi STOCK MARKET by BABSON'S REPORTS o.- o. we UPHEAVAL FACING MINICOMPUTER FIELD FIELDA A substantial shakeout in the minicomputer mini computer industry is expected over the near term A number of adverse forces forces forces for for- ces have been building up for some sometime sometime sometime time and are likely to cause a of the weaker or more marginal firms Such factors as tight money high interest interest in in- terest rates sharp competition cautious cautious cautious cau cau- capital spending policies and the general economic slowdown have caused caused caus caus- ed an especially hostile environment for those recent entrants lacking an established established capability in service maintenance ance and soft wear The anticipated shakeout however should produce beneficial beneficial bene bene- results for the solidly entrenched entrench ed minicomputer firms and ultimately pave pave the way for more profitable growth in this field for the balance of the i t Ii Minicomputer And Its Industry Potential A minicomputer by a generally accepted accepted accepted ac ac- definition is a priced low-priced programmable programmable pro pro- computer usually costing less than with a memory capacity capacity capa capa- city of words and an 8 to 16 bit word size capability All AH types of auxiliary equipment called peripheral devices can be adapted to facilitate the and output of data At first the minis were confined to engineering and scientific applications for laboratories ies les production lines and process con systems Sub Subsequently there was wasa a up step-up in demand in the wider-based wider business market Manufacturers soon learned that costly programs and extensive extensive ex- ex peripheral equipment would restrict restrict re reo strict markets and therefore they designed de de- de- de sinned signed the machines for special tasks without the additional programming expense Besides the wide business applications applications applications ap ap- the minis are now gaining recognition in the emerging educational market Industry Forecast In any relatively field expansion estimates range nil all over the lot With minicomputers projections are particularly varied due to the fact that minis are but one sector of the total computer complex Even so most experts experts experts ex ex- agree that this segment could grow even faster than the entire computer minis at 40 per cent annually through the as compared with the 15 per percent percent percent cent expected for the total computer business Sales Including peripheral equipment and services reached about million million million mil mil- lion in 1969 and could rise to billion l-billion- plus by 1973 or 1974 Some six out of every 10 computers could be of the mini variety by 1975 If so this would mean that there would be minis in a projected production of computers computers com com- that year At the present time there are only about minicomputers minicomputers minicomputers in operation here and abroad Dominant Companies In The Field Of the tile 75 or more minicomputer makers makers mak make ers third one-third may be out of business by the end of 1970 according to industry industry in in- The experts believe the total could be down to 10 or 15 by next year Digital Equipment Corporation Corporation Corpor Corpor- Is generally reputed to account for 55 per cent of minicomputer sales while Varian Associates and Hewlett Hewlett- Packard late but rapidly growing entries have a market share of 10 per cent and nine per cent respectively Broader-based Broader Honeywell accounts for seven per cent Lesser known stalwarts such as Data and General Automation Automation Automation Auto Auto- mation have anywhere from three per percent percent percent cent to seven per cent of the market marlet A second tier is composed of more diversified diversified di dl versified companies such as Lockheed Motorola Litton and Beckman Instruments ments Scores of smaller unknowns make makeup up a third tier Future Investment Guide The Research Staff of Babson's Baboons Reports Reports Reports Re Re- ports foresees renewed weakness in the stocks of many minicomputer firms because because because be be- cause of the oncoming shakeout But Dut once this has run its course the Staff would consider Honeywell a major manufacturer and two sized medium-sized contenders Packard Hewlett and VarIan Varian Varian Var Var- ian Associates for investment purposes Digital Equipment dominant in the field is another interesting situation |