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Technology Stocks : Micron Only Forum -- Ignore unavailable to you. Want to Upgrade?

To: Steve Lee who wrote (51514)	6/26/2000 9:08:00 PM
From: Earlie	Respond to of 53903

Steve: Corporations have always purchased about 2/3rds of annual PCs sold. About last September, the "resellers" (who sell the majority of PCs sold to business) started to witness a dramatic slowing of their business. To their credit, most of them were forthright about what was going on and provided the ugly details in their warnings and quarterly reports. Since then, things have actually deteriorated even more, to the point where resellers are actually filing for bankruptcy. Witness MicroAge and Inacom. Even the very largest resellers are laying off staff, cutting expenses etc., in an effort to survive. Corporate in-house computer managers have been telling everybody for about a year now, that they would not be buying until new applications appeared. Most of them spent the last two years living in their operations getting ready for Y2K. Now they want to coast for a couple of years. Only N.Y. analysts who never venture out of their offices spewed the nonsense that there would be large corporate purchases after Y2K. It is a myth. I spend a fair amount of time prowling this territory, and have an excellent contact base, created over many years. To a man, the sales guys and gals who address the corporate world are more than worried. At the retail level, as noted in earlier posts, there was an unusual bulge in early spring consumer purchasing. It coincided almost perfectly with the massive rally in the Nasdaq. Interestingly enough, as the Nasdaq fell, so did the retail purchasing, to the point where today, it is a dry gulch. Even the local cloners are worried and they are the last to feel the pinch. The way to verify this is to call a couple of dozen retail computer stores and ask them how sales are going, especially compared with last year. Don't bring up ASPs as they will likely start choking. Incidentally, Emachines CEO outlined almost precisely what I am saying in a "warning" his company provided about two weeks ago. GTW has also allowed that things are slowing rather abruptly. Micron's PC sales were also "disappointing" and IBM saw fit to exit the retail PC market entirely after having lost about a billion bucks over the last year and a half. HWP's sales guys are moaning the blues and CPQ is "steamlining (i.e. cutting in half) its PC model lines. It's tough out there and it is about to get worse. The word is "saturation". Only in Japan, and imperceptively in Asia, has there been a modest rise in y-o-y PC sales, at least as reported by some of the agencies over there, Interestingly enough, the Japanese GDP breakouts don't seem to evidence nearly as big a rise as some of the agencies report. But of course, the Japanese GDP numbers are not reported in "Chained Dollars" nor do they employ "Hedonic" analysis. Thank goodness for that. (g) Best, Earlie