PC, First, you write as though the slowdown in pc sales growth is a theory. Which means you haven't checked the reported #s for the past 3 years. The slowdown is real. The glut is real. Only the stock prices are unreal.
Which big cos. are you talking about? Not Compaq, which has almost nothing in eps. Not Dell, which is floundering here, though admittedly at a level others would love to achieve. Certainly not IBM, which is losing market share hand over fist.
Nope, the reason the stocks are up is that the herd simply does not understand the pc market right now. Retail unit sales were high for Xmas, though the glut on the shelves proves it wasn't as high as expected. If they don't have any on the East Coast, tell them to roll their trucks up to Houston or to any Ingram or Inacom warehouse for all the supply they want.
Even the decent unit sales at retail can't mask the fact that dollar sales growth is at the worst level since the 1991 recession.
Then we get to business sales. They ain't happening, as the distributors are telling us nearly every week. And that is only 70% of the pc market. And if there is little or no or even negative unit sales growth on the business side, what does that mean to the revenues? Disaster.
How can someone view a 3 year decline in sales growth as temporary? Even the bulls aren't that stupid. And as we turn negative this year, they are going to be shocked that their boom in sales is really a bust.
Nope, investors will dump the pc related stocks and, if there is no general crash, move into other areas. It is a done deal. The fundamentals simply stink too badly.
MB |
