Trish;
<<The BW article is a joke, imho. >>
I need for you and Gus to help me understand because I have been leaning in the direction of the arb. I think the latest
tech correction (maybe correction isn't a strong enough term) is not a protracted one. I think we will see some dust
settling over the next few weeks and we will see some momentum come back to tech before a possible revisit of a Summer
doldrums effect. In that time VRTS may rise on the basis of just how good the SEG deal is for
them, and, as you point out, SEG will track. It is an interesting situation but admittedly out of my scope
and unrelated to past investments I have made in SEG. I wish Kam was still around to comment. This is
sort of "up his alley" IMO.
Would love to hear more comments on this.
(Please...no comments on my emphatic statement about never investing in SEG again as long as this
mgt team were in place. This particular hypothesis is specifically dispassionate and time has a way of reducing the fires. <VBG>
best,
Stitch (see somewhat related below:)
Growth of PC Market Continued
In First Quarter, Researchers Find
By DAVID P. HAMILTON
Staff Reporter of THE WALL STREET JOURNAL
The global personal-computer market continued to grow at a relatively healthy rate in the first quarter, two market-research firms reported, although the firms disagreed over whether weaker sales of corporate PCs in the period could indicate rougher sledding ahead.
The reports from International Data Corp., a research firm based in Framingham, Mass., and Dataquest Inc., a unit of Gartner Group in San Jose, Calif., both indicated that PC-sales growth slowed somewhat in the first quarter from the year-earlier period. IDC found that worldwide PC shipments rose 20% to 30.4 million units in the quarter. A year ago, IDC found PC sales growing at 21% in the first quarter.
Dataquest, meanwhile, pegged worldwide growth in the first quarter at 15%, down from 17% a year earlier. IDC and Dataquest often differ in some respects of their analysis because the two firms use different methodologies, although they generally indicate the same broad trends.
Despite Numbers, Debate Continues
The new research-firm numbers do little to settle a debate started last week, when chip maker Intel Corp. and software giant Microsoft Corp. issued seemingly divergent assessments of the PC market's health. Intel, which conceded it has underestimated PC demand for much of the last year, said demand for its key microprocessors remains strong and announced plans to spend an additional $1 billion this year on chip factories to meet that demand. Microsoft, meanwhile, reported somewhat lower-than-expected revenue and blamed weak demand for corporate PCs.
Dell and H-P Charge Ahead
U.S. PC market, first quarter 2000
Manufacturer Unit Shipments Q1 '00 Market Share Q1 '99 Unit Shipments Q1 '99 Market Share % Change
Dell 1,860 16.8% 1,380 14.3% +34.8%
Compaq 1,820 16.4 1,522 15.7 +19.6
H-P 1,393 12.6 800 8.3 +74.1
Gtwy 1,023 9.2 908 9.4 +12.7
eMchns 535 4.8 298 3.1 +79.5
Apple 486 4.4 380 3.9 +28.0
IBM 445 4.0 766 7.9 -41.9
Others 3,512 31.7 3,622 37.4 -3.0
Note: Shipments in thousands of units, market share in percentage points.
Source: Dataquest
Analysts from Dataquest and IDC said that much of the PC market's growth derived from a boom in consumer-PC sales, particularly in the U.S. and Asia. The corporate-PC market, by contrast, was sluggish, thanks largely to a post-Y2K effect, in which corporations slowed spending on PCs out of concerns over the year-2000 computer bug.
But the two research firms differed over the likely implications of that slowdown. Bruce Stephens, an IDC analyst, said he expects the worst is over now that Y2K fears are fast receding. "We expect to see improvement in corporate-PC demand in future quarters," he said. "As for overall unit growth, we would still characterize it as good."
Dataquest, as it has in recent quarters, struck a more somber tone, warning that the business-PC market in the U.S. increasingly faces saturation and potential stagnation. Charles Smulders, Dataquest's chief PC analyst, argued that PC makers will have to emphasize creative new strategies, such as offering simpler and more stylish types of PCs and programs aimed at distributing home PCs to the employees of large corporations.
Dell, H-P Are Quarter's Winners
Among major PC makers, Dell Computer Corp. and Hewlett-Packard Co. emerged as clear winners in the quarter. Dell continued to gain ground on worldwide market-share leader Compaq Computer Corp., whose share dropped a point to 13% from 14% a year earlier, according to IDC. Dell, meanwhile, rocketed ahead with a 31% rise in unit shipments, boosting its global market share to 10.5% from 9.7% a year earlier.
Dell also managed to hold on to the No. 1 slot in the U.S. market for the second quarter in a row, although its lead is a narrow one. Indeed, Mr. Stephens suggested that Compaq, which has struggled to stabilize its own corporate-sales operation, will try to emphasize its advantage in the consumer-PC market to seize the lead back from Dell.
H-P, meanwhile, expanded world-wide sales at a rate nearly twice as fast as Dell, although H-P's total shipments remain only about two-thirds as large. Thanks largely to its own prowess in the consumer market, H-P boosted its global market share by roughly two points, to 8.1% by IDC's reckoning, making it the No. 3 vendor both globally and in the U.S.
Other PC makers mostly suffered in the quarter. International Business Machines Corp., which announced its withdrawal from most U.S. retail sales last year, saw its U.S. shipments drop a stunning 42% from a year ago, dropping it from fifth place to seventh, according to Dataquest. IBM also lost ground globally, switching places with H-P in falling to fourth place from third. Gateway Inc., whose sales remain largely concentrated in the U.S., also lost ground to H-P in the U.S. market.
A few smaller PC makers managed to eke out some significant gains in the U.S. market. Both IDC and Dataquest found that eMachines Inc., an upstart maker of low-end PCs backed by two Korean manufacturers, broke into fifth place in the U.S. thanks to a roughly 80% surge in unit shipments. And Apple Computer Inc. also gained roughly a half-point of market share in the U.S. during the quarter, Dataquest reported. |
