Microsoft says Y2K might hurt PC sales (nothing new, really, just a repetition of what Microsoft has said many times in the past, with a slight update for current conditions)
For Personal Use Only
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biz.yahoo.com
Friday April 9, 10:51 am Eastern Time
INTERVIEW-Microsoft sees
uncertainty in computer sales
By Neil Winton, Science and Technology Correspondent
PARIS, April 9 (Reuters) - Software giant Microsoft Corp
(Nasdaq:MSFT - news) warned on Friday that the information
technology industry now faces a period of sales uncertainty, as big companies complete preparations
early to fight off the millennium computer bug.
Michel Lacombe, President of Microsoft's Europe, Middle East and Africa division, said in an
interview with Reuters, sales of personal computers (PCs) could grind to a halt as far-sighted large
corporations wrap up plans to tackle the bug.
The millennium bug prevents some computers from correctly recognising the year 2000. When
clocks strike midnight on December 31, 1999, the worry is that computers programmed with double
digit dates might crash or spew out flawed data.
''It is not clear to the information technology industry what will happen in the next months,'' Lacombe
told Reuters at a seminar organised by Microsoft.
''Large companies have shown good planning with their work on the Y2K (Year 2000) problem.
We have not seen a depression in the market but (prospects) are still up in the air about what will
happen in coming months,'' Lacombe said.
Many companies have decided to buy new computers to forestall any year 2000 problems rather
than seek to fix the software on old ones.
The hope is that small- and medium-sized companies which have been slow to renew equipment
which might fall prey to the bug, will take up this slack, Lacombe said.
''SME's (small and medium-sized enterprises) haven't shown the same level of awareness of Y2K
and it is difficult to predict what will happen in months to come. A lot of smaller businesses will have
to think and act on this problem,'' he said.
Earlier this year, Lacombe told Reuters that Microsoft was concerned that its results for the second
quarter ended December 31, when revenues jumped 38 percent to $4.94 billion, might have been
distorted by Y2K spending which might suddenly stop.
''When we come closer to the Year 2000, and companies stop purchases, it might turn out to be a
bubble,'' Lacombe said then.
Analysts shared this worry and scaled back predictions for personal computer sales in Europe this
year.
In late January, British research company Context said it cut its growth forecast for 1999 to between
17 and 20 percent for PC sales in western Europe from an earlier prediction of an increase of
between 20 and 22 percent. In 1998, western Europeans bought nearly 25 million personal
computers.
Context senior research analyst Marie-Christine Pygott said on Friday that she saw no evidence yet
of a weakening market, and stood by her January forecast.
Microsoft also cut its own forecast in January but remained hopeful.
''At Microsoft we are reasonably optimistic that growth this year in Europe will be in two digits,
between 10 and 15 percent. There are some signs the business is sustaining,'' Lacombe said.
Lacombe said he felt more confident now that problems posed generally by the millennium bug would
not be too severe.
''A lot of energy has been spent on the problem. The big disasters we've been reading about, I think
it's reasonable to say that it's not going to happen.''
Neil Winton 44 171 542 7975 neil@jinks.demon.co.uk
Copyright © 1999 Reuters Limited.
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