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QB DROP AT RETAIL EXPLAINED

Although Intuit made a brief effort at explaining how its QuickBooks market share dropped during to 87 percent for the first quarter ended October 31 from 94 percent at the end of the fourth quarter, a lot more detail came out this week. Intuit says it wasn’t a matter of competitors (meaning essentially Peachtree) selling that much more. Intuit sold 30,000 less units than it did a year earlier.

Investor relations VP Jerry Natoli painted that picture in a presentation Wednesday at the Credit Suisse Technology Conference. In fiscal 2009, and the first quarter of fiscal 2010, the company aggressively discounted QuickBooks. Natoli said instead of selling QuickBooks for $199, “it might be $69 for a couple of days in some retail stores. We didn’t do that this year in our Q1.” Intuit decided that the discounting did not attract new customers and, while it helped small businesses during the height of the recession, it was primarily drawing users who would have renewed at a higher price. He said that Sage might have sold “a couple of thousand more” units of Peachtree. Connie Certusi, the SVP who heads Sage's small business accounting operations, thought that another factor was that Intuit was heavily emphasizing QuickBooks online, not desktop products, in its advertising. She also noted that retail "is only one piece" of software sales. Sage, she continued, prefers to measure usage share and that Peachtree has been growing there for three years.

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