Chris:
If IDC's 92.0 million PC unit number is taken at face value, (and they are, as noted above, always optimistic), we are already into negative revs. on PCs. The "channel stuff", should be viewed for what it is, a pulling of Q1 sales back into Q4 to jack up lousy numbers, so it is actually a significantly lower number than what IDC suggests. ASPs continue to fall and the sales action is primarily at the bottom of the pricing spectrum. A seriously negative rev number for 1999 is a "given" already.
The channel stuff will preclude any serious shipping of PCs for some time, so a year that looks ugly on fundamental data will not get off to a rousing start. I'll stay with my forecast of negative UNIT sales for 1999. On the basis of disappearing prospective buyers alone (Brazil,etc.), it will be ugly, never mind the strong evidence of market saturation, excess capacity, no new applications, etc.
At the semi end of the game, in spite of the dreams emanating from Wall Street's analysts, it is an ongoing disaster. One need look no further than Micron's numbers for verification. Here we have the supposed "low cost producer" (which is nonsense) losing in excess of half a billion dollars over the last 4 quarters (earnings from operations).
How can any rational analyst suggest that MU can or will make money when the interest bill alone will exceed $100.0 million annually, (given the current level of debt and the fact that they will be forced to spend the cash this year to try to get those TXN plants closer to the current technology, so that they won't lose quite as many dollars per chip as they do now).
While on the subject, why anybody in their right mind would ADD capacity as we move into the teeth of a capacity blizzard, is beyond me, unless of course there is a bucket of cash provided that stretches the thing out and lets one dump stock (note the details of that secondary offering announced yesterday,...directors and employee options, etc)
We are already well into a full blown tech sector "bust" as far as I am concerned. Now if only we could call the timing when the mad momentum players get their teeth handed to them in a small cup. (g)
Best, Earlie |
