From Money Daily: IBM (NYSE:IBM) will fold its consumer division that makes business personal computers as soon as this week, The Wall
Street Journal reports. IBM tried to get into the home PC market, but got hammered when competitors began pricing their models under $1000. Now, industry analysts say IBM will fold the division and lay off hundreds of employees. The company is due to issue its quarterly earnings statement next week, and losses from its foray into the home-PC market may top $300 million for the year.
I think the sub-$1,000 PCs are going to hurt Dell's growth unless they decide to enter this market. The competition will be fierce, but, let's face it, it is--BY FAR--the largest market segment, both in the U.S. and certainly in the international arena where people are much poorer. While workstations and servers are experiencing better growth, this is because the growth is calculated from an initially small base, and growth rate will surely decline at some point. The market potential simply isn't that big for the workstation and server market, so any company that just stays in that area is going to get its growth wings clipped. IMHO.
Well, folks, it does look like the decline is starting a little earlier than I anticipated. BTW folks, did you notice TXN price decline after beating expectations with earnings. Did I not say this is what's happening in this month. You surely can see it with JBIL. Tomorrow might still be better, especially if Intel reports better than expected earnings, but nonetheless, if it didn't start today, the decline will surely start after tomorrow, and decline steadily toward the end of this month. Stock prices might decline 10% or more by the end of Oct. So be careful out there! Ya hear? |
