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Strategies & Market Trends : Ask DrBob

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To: Louis V. Lambrecht who wrote (58822)	5/6/2002 5:51:14 PM
From: stan_hughes	Read Replies (1) of 100058

Louis - IMO the IBM mid-1990's elixir is wearing off. Hardware sales are in the dumper now along with everyone else's IT sales. The movement to thin client applications is not only weighing on the PC replacement market, it will further reduce the need for new mainframe installations except in the largest of companies. The services side, which is a lagging revenue element due to its after-sales nature, is in the early stages of disintegration. As the skilled tech labor pool loosens up, companies looking to cut costs will be able to displace their support agreements with cheaper in-house talent. A slow process to be sure, but so is a small hole in the bottom of a boat. On the business investment side, I expect IBM isn't faring any better than INTC or MSFT, maybe even worse - those are hard numbers to ferret out. I'd be hoping for no writedowns at best. Tough sledding ahead IMO. Whatever one thinks of IBM management's abilities, the IT world is a real jungle right now and I think it gets worse before it gets better

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