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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: Proud_Infidel who wrote (44552)	3/26/2001 9:50:58 AM
From: Proud_Infidel	Read Replies (1) \| Respond to of 70976

PC slowdown will continue without stong replacement market, warns Dataquest Semiconductor Business News (03/26/01 05:35 a.m. PST) SAN JOSE -- Personal computer makers will engage in another round of price wars in the U.S. in 2001 and shift more of their sales to other regions in the coming years as they struggle with slower growth in North America, partly due to weak economic conditions but also market saturation, said Dataquest Inc. today (March 26). Dataquest predicted a steady decline in percentage growth of PC shipments worldwide during the next five years. In 2001, PC suppliers are expected to deliver 144.5 million computers, a 10.7% increase from 130.5 million systems in 2000, according to the market research firm. In 2005, unit shipments will reach 212.9 million systems, an increase of just 7.9% from 197.2 million PCs in 2004, Dataquest said. "The PC industry suffered a nasty surprise in fourth quarter 2000 on account of the dramatic turn in the U.S. economy," observed analyst George Shiffler, who is the PC forecast coordinator for Dataquest's Computing Platforms Worldwide group. "We're concerned that circumstances in the United States still appear to be deteriorating and that the U.S. slowdown looks to be spreading to the rest of the world." Dataquest analysts said they do not see market conditions improving until 2002. But even then, they said, the industry faces some significant challenges from market saturation. According to Dataquest, the U.S. PC market is nearly saturated, and Canada and Western Europe are not that far behind. "Unless the industry is able to stimulate faster replacement cycles, shipment growth will undoubtedly slow in these markets," Shiffler warned. "Given that these markets constitute 55% of the global PC market over the foreseeable future, that will put a significant damper on industry growth." "We anticipate a price war in the United States in 2001, as direct vendors, Dell and Gateway, endeavor to gain market share from Compaq, Hewlett-Packard and IBM," said Martin Reynolds, group vice president and research fellow for Gartner, the parent of Dataquest. "The direct vendors will lower margins to do this, which will cause others to give serious thought about how they run their PC business. "The price erosion will make other regions of the world buy more PCs, so the global vendors might also choose to shift their share from the United States to maintain profitability. U.S. national vendors do not have that choice," he said.

To: Proud_Infidel who wrote (44552)	3/26/2001 9:57:06 AM
From: brunn	Read Replies (1) \| Respond to of 70976

The improvement in PC picture may be an expression of the decreased seasonality of its business. As I recall, when the bottom fell out in the PC makers last November, there was a feeling that the fall in their business was related to decreased holiday spending. People were saying that the previous business pattern of greater sales in the holiday quarter was flattening out and the PC business would develop into a more smooth pattern over the entire year. If this is true, the December quarter's lousy performance should be offset by improved conditions the remainder of the year.