Hardware is 40% of IBM revenue and PC's are 40% of hardware, or 16% of total revenue.
Looks like IBM may be set up for another report of growing PC revenues and growing PC losses. Kemble may be right that Dell is taking pain to give great pain. A bit like the cold war, where the USA ran huge deficits for years in the arms race until the USSR finally collapsed. That marked the start of the current decade long bull market as defense spending was reallocated into productive activities. A similar thing may be happening in the computer biz. When the inefficient producers finally give up and start investing in productive activities instead of futile attempts at beating Dell on price, everyone will win.
Ken
The fate of IBM's quarter lies in how its computer hardware businesses perform. ''If there is a problem in the business, it's in the hardware, which is about 40 percent of the total mix'' of revenues, Milton said.
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''PCs, which represent almost 40 percent of (IBM's) hardware revenue, are expected to be grow 25 percent year over year in the March quarter,'' wrote John Jones, a securities analyst with Salomon Smith Barney, in a recent note to investors.
In a bid to defend its hold over big corporate computer spenders, IBM has slashed prices on office desktop computers in order to fend off aggressive moves by Dell Computer Corp. (Nasdaq:DELL - news) to gain share among such businesses last quarter.
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