Hi Investor2; My guess is that world-wide PC sales will continue to increase for another decade or so. There are huge numbers of people out there that don't have a PC, but need one. (I.e. that have time and money to burn...)
The PC industry's problem is that consumers are getting by with older technology than before. A nation-wide company is now advertising 300MHz machines over the radio for $500. I don't see the prices of computers stabilizing for a couple of years. My guess is that they will get down to the $100 level for a machine without a monitor or printer. Adding the monitor and printer would bring it up to around the $250 or $300 level. At these prices, (which were unimaginable at the time I began suggesting them, but are within bowshot of where we are now) the box makers will be hard pressed to turn a profit.
The server market will similarly follow the micro market into the toilet, but it will have a delay of about 2 years. The reason for the delay is covered in my previous posts over the last 18 months, but is basically due to the server being more complicated machines.
The destruction of the PC market will force a lot of companies that currently sell low end machines into the server market, which will be flooded, at least for a few years. At the end of those few years, the integration dam is going to burst on the server market, just as it has already burst upon the PC market, and the surviving companies are going to be in trouble.
This is all independent of what happens with the world economy. The world economy is a big thing, and small changes in it are significant. Not so the PC industry, which regularly grows by huge percentages. If PCs had no ($) growth for a year, it would be a reduction of a huge amount from their usual growth, but the companies wouldn't go out of business.
I think it is possible that even with the decline in PC prices, total dollars shipped could still increase. But the significance of the radical decrease in unit costs is that some companies are going to be more efficient at that very, very, very low end, and some are not. My guess is that Dell will not be one of the companies that survive in the low end. Dell bulls disagree...
Anyway, best of luck. You have a pretty good reputation (with me) for knowing what is going on, I'm going to search through some of your recent posts and see what you see for the future...
-- Carl
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