If IBM is going to have trouble and W2K is not going to be of much help with sales why would we think cpq can do better?
NEW YORK, Feb 18 (Reuters) - Half of corporate technology
buyers surveyed by Merrill Lynch said their spending on IBM
computer hardware is likely to decline this year, according to
a report released by the top U.S. brokerage on Friday.
"Hardware continues to be IBM's weak point," analyst Steven
Milunovich wrote of the survey of 50 American and 20 European
chief information officers at major corporations.
Computer hardware such as mainframes, workstations,
personal computers and data storage equipment generated roughly
40 percent of IBM's $88 billion in 1999 revenues, the Merrill
analyst estimated.
Investors have been looking for signs of when IBM, the
world's largest computer maker, will begin to rebound from a
slowdown in spending on new computers that occurred among some
large customers, tied to the Year 2000 computer transition.
When asked if their spending on IBM hardware this year is
rising or falling, half of respondents said it was falling, 18
percent said it is rising and 32 percent said it was staying
the same.
"Although the product set appears to be improving, we think
lack of focus is a problem," the report said.
"We're a bit concerned about (second quarter) hardware
growth. We think the stock will be stuck in a near-term trading
range until there is more clarity in hardware," he said.
Milunovich has been pessimistic about IBM hardware growth for
the last several quarters.
The stock has traded essentially in a range between $110
and $120 since the start of 2000 as investors look for signs
IBM is making inroads into the fast growing Internet equipment
supply business, where rival Sun Microsystems Inc. <SUNW.O> has
dominated.
The report also found that while 70 percent of responses
were positive about Microsoft Corp.'s <MSFT.O> prospects in
business computing, Windows 2000 will not immediately threaten
Sun, the leader in providing computers to run Web sites.
"The consensus view is that Windows 2000 will not take the
world by storm, more users are likely to upgrade ... in 2001
than 2000," the report said.
"The next disruptive technology is likely Linux,"
Milunovich said, referring to the alternative operating
system's to shake up the existing software industry order. |
