The new version of Quicken that Intuit Inc. introduced Wednesday is a great improvement, analysts say, but is unlikely to make headway against the much more popular alternative, bank Web sites.
The use of desktop personal financial management (PFM) software has hit a wall. Consumers have flocked instead to Web sites offering many of the same features for free.
Even in the market for the desktop variety, Money from Intuit's archrival Microsoft Corp. is gaining share. But some observers doubt such products have much of a future anyway.
Fortunately for Intuit, sales of Quicken have been overtaken by those of its other products.
Quicken 2004 is meant to be easier to set up. Jeff Zimmerman, a Quicken product manager, said installation and keying in banking account information have been so cumbersome that more people have tried and abandoned Quicken and Money than now use them.
"We are finally making it easier to get started," Mr. Zimmerman said Wednesday.
Avivah Litan of the Gartner Inc. research firm in Stamford, Conn., agreed. She said she was impressed with the new setup process, which makes it simple to log on to a banking or brokerage Web site and automatically download account information and transaction details.
"Quicken has always advertised itself as an easy way to manage your finances, but the truth is it was not that easy to get it set up," Ms. Litan said. "This is about 80% to 90% easier."
With market growth flat, Intuit has focused on its tax products and its bookkeeping applications for small businesses. The Mountain View, Calif., company is devoting only minimal resources to Quicken, said Jim Van Dyke, the founder and principal of Javelin Strategies and Research, a Pleasanton, Calif., consulting firm.
Intuit "has changed the direction of the ship," he said. Quicken "is not where they make their money."
In fact, the company reported Tuesday, its revenue from QuickBooks grew 24% in its fiscal 2003 (which ended July 31) to $242.8 million, and its TurboTax revenue 20%, to $422.9 million. Revenue from "other businesses," which include Quicken, crept up just 2%, to $191.9 million.
Comerica Inc. of Detroit, which has offered online banking for roughly a decade, says the percentage of its online customers using Quicken has remained steady at only 3%. "Our customers told us they find our Web site's capabilities to be easy, convenient, and cost-effective compared to the cost of buying Quicken and loading it onto their computers," said spokeswoman Sara Snyder.
First Tennessee Bank in Memphis and Charter One Bank in Cleveland said about 10% of their online banking customers use desktop personal financial managers. That figure too has been flat for years, they said.
"It's all about convenience," said Javelin's Mr. Van Dyke. Using a desktop personal financial manager "won't save you time," and the most important features are "free or very cheap" on bank Web sites.
But Mr. Zimmerman said Intuit does not consider banking sites competitors. Quicken can do many things that they cannot, he said - especially categorizing purchases so users can monitor their spending.
But banks are considering such features as enhancements.
"We are exploring register capabilities that are similar to Quicken's categorization capabilities," said Mike Dobbins, the senior vice president for direct banking at Charter One.
"I think the banking sites will continually add more and more capabilities, to the point where you won't need to use Quicken," Mr. Van Dyke predicted. "I think PFMs are going to die a slow death."
Intuit estimates that about 15 million people use Quicken. Former users of the program and its desktop rivals - "people who have realized they need to organize their finances" - are the initial target for the new product, he said.
Ms. Litan, a Gartner vice president and research director, said the new version might increase the number of Quicken users by as much as 10%.
"If they can convince people to open the box and stick the disk in their computer, I think the users will like it," she said. The problem is getting them to try.
"I think Quicken's future will be determined by this release," Ms. Litan said.
