To All, Despite all the hoopla about gangbusters sales and the disinformation from Steve and others, the pc market grew a puny 16 pct. in unit sales last quarter. Wasn't it yesterday Steve told us it was way over 18 pct.? -g-
Now, 16 pct. is nothing to sneeze at. It is a decent rate of growth until one realizes that the ONLY reason there is any growth at all is a much lower selling price of about the same percentage. Which means that dollar growth is close to nil or even negative. Also, it is very suspicious that two of the three fastest growing pc companies, Compaq and Hewlett, were both stuffing channels pretty aggressively. Perhaps there was sell-through. We have to wait and see the reports from the channel. My guess is that sell-through sucked wind again this quarter and that the real growth of final sales is much less than 16 pct. But that is speculation. The final numbers, even assuming total sell-through of the stuffed crap, are bad enough and the market is actually underreacting to this disaster. Especially after the lies being told about "how good things are in pcs."
So, what is next? More firms are moving into servers because of the margins and growth there shown by Dell, CPQ, and HWP. It is hard for me to believe that somebody would actually buy a MUEI or Gateway server, but they well may. There is no doubt whatsoever that they will buy the new NEC servers. This minor segment is still ramping up until the Y2K problem kills it dead, so the new competition may be absorbed without huge displacement. So, the next big move will be for the losers to try to regain market share in pcs, and there are only 3 possible ways to do that: 1. Make something better or unique. Not likely, as this is almost totally a commodity market now. 2. Outguess CPQ and Dell about what will be hot next. Also not a likely source of comfort for the market share losing firms, as those two companies are simply smarter than most of the others. 3. Lower prices to move boxes, even at a loss, if necessary. Gonna happen. But for Packard Bell to move boxes, it has to cut deeply and before Compaq cuts. A nice game of leapfrog is likely for pc put holders. This is deadly for component and peripheral firms. They will have NO pricing power until this price war is a mushroom cloud. -g-
Good luck, MB |
