spots, i can tell you I beleive this press release.
read this close, notince the 80 pc accounting for 23%..
wooooow.
A worldwide glut of computer components and a shift in
consumer preference for low-end personal computers have put
pressure on companies to cut their prices and lower profits,
analysts said. Demand for technology in international markets
also appears to be flagging.
"The economy is expanding, but reasonably slowly," said
William Schaff, chief investment officer of money management
firm Bay Isle Financial Corp. "That implies that most companies
can't continue to expand (their revenue) at 40 percent a year
any more."
Schaff said companies that make "commodity" products --
such as personal computers, disk drives, cellular telephones,
memory chips -- likely will have to continue cutting prices
steeply in coming quarters to offset slowing demand.
After the market closed Monday, disk drive maker Western
Digital said it would report weaker-than-expected earnings for
the third quarter, blaming higher costs and falling prices amid
a glut of disk drives.
Computer networking equipment maker Ascend also said it
expects to report weak profits and sales for the quarter,
primarily because of slowing sales in Europe and Japan.
In late afternoon Nasdaq trading, Ascend was down $3.125 at
$32.125 on volume of 29.7 million shares, the most active issue
in U.S. markets. Western Digital was among the biggest losers
on the New York Stock Exchange, losing $8.69 to $40.31 in
consolidated trading.
Semiconductor giant Intel was down $1.50 at $93.875 on
Nasdaq. And Compaq Computer Corp. (NYSE:CPQ) the world's biggest
PC maker, was down $1.50 at $75.50 in consolidated trading on
the NYSE.
The technology-laden Nasdaq composite index was down 3.91
points at 1,691.07.
In the past few weeks, bellwether stocks like Intel, Cisco
Systems Inc. (NASDAQ:CSCO) and Microsoft Corp. (NASDAQ:MSFT) have been
mixed amid signs that computer prices are falling faster than
usual.
"Even though we've had unit growth in the consumer channel,
every month prior to June we saw a decline in revenue" because
of price cutting, said Matt Sargent, industry analyst at market
researcher Computer Intelligence.
Sales of $800 PCs now account for 23 percent of retail
sales up from 7 percent in January, Sargent said. The average
selling price of PCs also fell below $1,500 for the first time
recently.
"The part of the market that's really falling out is the
$2,000-plus" segment, Sargent said.
That has forced PC makers to buy more low-end parts, which
in turn is pushing component makers like Western Digital and
Intel to cut prices.
Thomas Kurlak, an influential analyst at investment bank
Merrill Lynch & Co., told his clients again Tueday that Intel
is selling more low-end microprocessors than was expected.
Intel could miss his earnings forecast of 92 cents a share,
people who heard his conference call said.
An Intel spokesman declined to comment on Kurlak's
projection.
Key technology companies will begin reporting their
third-quarter results next week. |
