DELL getting into the act of trying to SCUTTLE the HWP-CPQ merger at the last minute (sure looks like they don't want the deal to go thru unlike what Wierd Wally has been insinuating)
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UPDATE 1-Dell sees no signs of strong market rebound
3/18/2002 6:31:23 AM
SINGAPORE, March 18 (Reuters) - Michael Dell, head of No. 1 personal computer maker Dell Computer Corp (DELL) , said Monday he has yet to see signs of a strong recovery in the industry.
The computer industry had one of its worst years in 2001, suffering its first decline in 16 years, both in terms of revenues and units shipped.
Speaking at a function for the American business community in Singapore, Dell said he sensed some improvement in the U.S., the world's largest market, but the overall tone was still cautious.
"What we are hearing in the U.S. is a fairly conservative tone among the leaders in capital spending," he said.
"They are watching the economy and they are watching the rebound, and they are taking their time in large projects.
"We are seeing some upgrades. I would say it is a slow and gradual recovery.
"But we are having to rely more on gains in market share...than necessarily on a massive rebound in the market."
While the industry suffered a five percent decline in unit shipments last year, Dell Computer managed a 15 percent increase.
The CEO of the Texas-based company later told a news conference that while big business has been reluctant to spend, small consumers were not as restrained.
"The consumer has continued to spend fairly aggressively. That has been a real bright spot in our business," he said.
Dell Computer has led a price war that has helped it win market share to become the top maker of personal computers, overtaking rival Compaq.
CONFLICTING SIGNALS
Dell's comments come amid conflicting reports from industry watchers about the PC business.
CSFB analyst Kevin McCarthy last week lowered hopes for the sector, trimming his 2002 unit growth forecast to five percent from 10 percent.
But market research firm International Data Corp said corporate spending would lead a rebound.
IDC last week raised its 2002 forecast for computer shipments to a gain of three percent from a 1.8 percent rise previously forecast in December. It said the market has been buoyed by strong U.S. retail sales and renewed hope for a jump in corporate technology spending.
HP-COMPAQ CHALLENGES
Separately, Dell also said if the proposed HP-Compaq merger went ahead the new entity would face big challenges in bringing costs down.
Hewlett-Packard Co. (HWP) and Compaq Computer Corp. (CPQ) face a make-or-break shareholder vote on a proposed $21 billion merger on Tuesday. Analysts say it is still too close to call.
"It is one of the more interesting merger battles that has gone on in all of corporate history, and certainly one that we are paying a lot of attention too," he said.
"On the one hand, according to data presented, these companies need to do something to drive their costs down. Perhaps combining them is one way to do it," he said.
"However, there is data around that shows merging large companies together...is not exactly promising. There are challenges to making that happen," Dell said.
He said he was confident that Dell Computer would continue to take market share from its rivals, regardless of the merger outcome. |
