PC Sales Fall for 1st Time Since '86 as Economy Slows
EDIT: And yes, AMD and INTC shipped more chips than a year ago
quote.bloomberg.com
07/20 08:58
PC Sales Fall for 1st Time Since '86 as Economy Slows (Update1)
By Jim Finkle
San Jose, California, July 20 (Bloomberg) -- Personal computer makers shipped fewer PCs during the second quarter, the first such decline since 1986, as slowing economic growth worldwide hurt sales from Compaq Computer Corp., NEC Corp. and rivals, researchers said.
Second-quarter global PC sales dropped 1.9 percent from a year earlier to 30.4 million units, said Dataquest Inc. The preliminary data were released hours after Microsoft Corp., whose software runs 90 percent of PCs, forecast that PC sales will grow in the ``mid-single digits'' in the year to June 2002.
Compaq, Dell Computer Corp., NEC and Gateway Inc. have fired thousands of workers, closed plants and slashed prices to weather the economic slowdown. News that price cuts, offers of free printers and cheap financing failed to keep sales growing helped send PC makers' shares lower in Europe.
``The PC market is growing much slower than people think,'' said Christian Koch, an analyst with Trusco Investment Management. ``The high-unit-growth days are basically over. It's a mature industry.''
Slower PC shipments, together with cooling demand for mobile phones, has hurt earnings at companies that make chips to power the devices. Intel Corp., the No. 1 chipmaker, reported a drop in second-quarter profit this week. STMicroelectronics, Europe's biggest chipmaker, saw profit fall in the same period.
Sales of mobile phones may fall in 2001 for the first time in the more than two decades since the industry was created, analysts have said. Morgan Stanley Dean Witter analysts said sales may drop about 8.6 percent to as few as 370 million units.
Fourth-Quarter Recovery?
Dataquest pushed back its forecast for a return to growth in U.S. PC sales, saying that's now likely to happen in the fourth quarter, rather than the third as it previously forecast.
``There is no particular demand to buy a new PC,'' said Mikako Kitagawa, an industry analyst with Dataquest. ``Many people have bought a computer in the last few years and it's still too soon to start replacing these.''
Dell, the world's No. 1 PC maker by number of units sold, was the only manufacturer whose sales increased during the quarter. Its shipments rose 20 percent from a year earlier to 4 million, raising its market share to 13 percent from 11 percent.
Dell said yesterday it expects to meet estimates for fiscal second-quarter earnings of 16 cents a share. Even so, its shares fell as much as 3.1 percent to 31.50 euros ($27.56) in Germany.
Sales of Compaq, the second-largest PC maker, fell 14 percent to 3.4 million. Its shares in Germany declined as much as 3.3 percent to 17.60 euros.
Gateway Lowers Forecast
International Business Machines Corp. and Hewlett Packard Co., the third and fourth-largest PC makers, respectively, in terms of global sales, also sold fewer personal computers in the second quarter than a year ago, both worldwide and in the U.S.
Gateway, which saw its U.S. sales fall 16 percent, yesterday reported a second-quarter loss and cut its forecast for the second half of the year. Its shares in Europe dropped as much as 2.80 euros, or 16 percent, to 14.60.
In the U.S., PC sales fell for a second quarter, dropping 6.1 percent to 10.7 million, Dataquest said.
International Data Corp., another computer-industry research firm, also released its data on PC sales. It said worldwide shipments fell by 2 percent to 29.8 million units.
Sales were flat in Japan, while growth slowed in China and India on cuts in government technology spending, IDC said. |
