Personal Computer Application Software Sales Reach $7.38 Billion in North
America in 1994

Record Fourth Quarter Closes a Record Sales Year

April 3, 1995 (Washington, DC) - The Software Publishers Association (SPA)
announced today that sales of personal computer application software in
the US and Canada reached $7.38 billion in 1994, a 16.6% increase from a
revised $6.33 billion in 1993. Fourth quarter 1994 (Q4 '94) sales were a
record $2.48 billion, easily surpassing the previous record quarter, Q4
'93, where sales were $2.04 billion. For the year, unit sales in North
America increased 77%, and were up 74% for Q4 '94. Worldwide unit sales
increased 77% for Q4 '94 and 78% for the year.

Windows applications accounted for 65% of the application software sold in
the U.S. and Canada in 1994, with sales of $4.78 billion. DOS and
Macintosh applications split most of the balance, with sales of $1.28
billion and $1.25 billion, respectively. For the year, Windows application
sales increased 45.2%, DOS application sales fell 37.2%, and Macintosh
applications increased 18.7%.

Record Fourth Quarter Sales

Q4 '94 sales were a record $2.48 billion, a 21.2% increase over the $2.04
billion sales in Q4 '93. Windows application sales increased 39.5% to
$1.65 billion. Macintosh applications sales and growth in Q4 '94 were the
best of the year, increasing 23.6% to $397 million for the quarter. In the
final quarter of the year, DOS sales declined "only" 26.9% to $415
million, as Christmas-season sales of entertainment software buoyed the
category. Nearly half of the DOS application sales was in the
entertainment segment in Q4 '94. The entertainment segment was the only
segment in which DOS sales increased in Q4 '94 and the full year when
compared with year-ago sales.

Word Processors and Spreadsheets Largest Categories, but...

Word processor and spreadsheet software remained the largest application
software categories in 1994, with sales of $1.03 billion and $830 million,
respectively. While unit sales growth in these categories remained solid,
price declines limited revenue growth for the year. Word processor sales
were up only 0.3%, while spreadsheet sales gained only 1.7%. In Q4 '94,
word processor sales declined about 11% and spreadsheet sales declined
about 9%.

In contrast, the two major consumer-oriented categories had a strong final
quarter and year. With sales of $358 million (up 64%), entertainment was
the largest category in Q4 '94, surpassing both word processors and
spreadsheets. Home education was the third largest category in Q4 '94,
with sales of $233 million, an 81% increase from Q4 '93. Entertainment and
home education sales were fueled by strong growth of both Windows and
Macintosh products.

"The past year has been one of turmoil in the application software
industry," said David Tremblay, SPA's Research Director. "Application
segments which have traditionally led the industry had little or no
revenue growth, while other segments emerged as growth leaders because of
new users (e.g. the home market) or new technologies (e.g., the PowerPC
Macintosh)."

The Software Publishers Association is the principal trade association of
the PC software industry. Its 1,100 members represent the leading
publishers in the business, consumer, and education markets. The SPA has
offices in Washington, DC, and Paris, France. SPA press releases are
available on-line on the SPA Worldwide Web site (www.spa.org), through
CompuServe (GO:SPAFORUM), and from SPA's faxback service at 800 637-6823.

Software Publishers Association
1730 M St, Northwest, Suite 700, Washington, D.C. 20036
202-452-1600,  Fax: 202-223-8756

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