Why Merrill Lynch's Milunovich is a world Class Schmuck-->
Drew:
Here is some' really funny,the guy says he is worried about a price war in the PC biz (like we didn't have one thus far)- Well Duh!!!
This guy gets paid for this?? Nice racket I say.
Well hello Earth calling Martian Milunovich- where have you been bub?
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Hardware stocks hit on PC price note
Merrill analyst points to revenue trend over unit growth
By Emily Church, CBS MarketWatch
Last Update: 10:00 AM ET Feb 25, 1999 Movers & Shakers
Futures Movers
NEW YORK (CBS.MW) -- Computer hardware stocks fell 1.7 percent Thursday after an influential Merrill Lynch analyst raised the prospect of a PC price war.
In a note to clients, Steven Milunovich cast the spotlight on top four PC makers Dell Computer (DELL), Compaq (CPQ), Hewlett-Packard (HWP) and IBM (IBM).
"We're concerned that vendor's growth objectives the next few years will be hard to achieve, perhaps resulting in pricing pressure," Milunovich said.
Even as unit growth looks to be around 15 percent for the next few years, the real issue for PC makers is the likelihood of falling prices, he said.
"The bigger change is in declining average selling prices (ASP) the past two years," he said. Revenue growth was just 6 percent in 1997 and 1 percent last year, according to Dataquest, he said.
"Our concern is that the recovery in ASPs predicted beyond 1999 may not occur, causing disappointing dollar growth for the vendors and the onset of price wars.
"If the industry dollar growth remains in the low-to-single digits, will the top vendors meet their aggressive targets? Probably not," he said.
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