Big PC makers upbeat about fourth quarter
Reuters, Wednesday, November 19, 1997 at 14:02
By Therese Poletti
LAS VEGAS, Nov. 19 (Reuters) - The biggest PC makers are
upbeat about the fourth quarter, as skittishness about Asia is
being offset by improvements in Europe and sub-$1,000 PCs are
expected to bring a big boost to the consumer PC business.
Computer industry executives at the COMDEX computer trade
show in Las Vegas were generally optimistic about what is
normally the biggest quarter of the year and seemingly unfazed
by the recent current crisis in many Asian countries.
While the ultimate impact of the currency crises in Asia is
still to be determined, some executives said demand in Asia is
now slowing down as a result. But two other positive factors
may offest some negatives due to the slowing Asian economies.
"We have strong order growth in Europe right now," said
Earl Mason, chief financial officer of Compaq Computer Corp.,
(NYSE:CPQ) the world's leading PC maker, based in Houston.
Mason said many corporations in Europe are starting to
focus on the so-called Year 2000 problem and are revamping
systems to avoid the software glitch that is expected to strike
older computers when they read the date 2000 as 00, due to a
programming trick in the 1960s which shortened the year to two
digits, used to save storage space on mainframe computers.
Compaq said that it will continue to manufacture products
in its Asian plants in Singapore and China, but it is moving a
lot of those products out of Asia and into Europe for selling.
"So far, so good," Mason said. Mason said Compaq is on
track for the fourth quarter and that he was comfortable with
the current analysts' consensus estimate of 82 cents a share.
Dell Computer Corp., (NASDAQ:DELL) which leads in the direct
sales of PCs, said its business in Asia is still a small part
of its overall revenues, with less than 10 percent of Dell's
total revenues coming from Asia-Pacific and Japan.
"We have a good news, bad news scenario," said Kevin
Rollins, president, Dell Americas. "The good news is we buy a
lot of components there, so we buy stuff in dollars," he said,
adding that because of the drop in value in some currencies,
Dell is paying less for certain parts, such as memory,
keyboards, disk drives.
Rollins also said most countries in Europe, with the
exception of Germany appear "to be on a bit of a rebound."
"It looks like it's got a bit of a spurt," he said.
****(Um.......and the Bad News????)
Hewlett-Packard Co. (NYSE:HWP) said it is not yet seeing an
impact from Asia on its business. Jacques Clay, vice president
and general manager, personal systems unit, said the consumer
market could be among the hardest hit.
"These people lost 50 percent of their wealth," Clay said.
"The consumer market will be impacted." H-P, he said, does not
have a lot of PC business in Japan, and its business in
Sinapore and China are not likely to be hurt. Malaysia is a
problem area, he said, but not a big revenue source.
"The U.S. is doing very well," Clay said. "We are the
fastest growing PC maker...We have to stay where we are."
International Business Machines Corp. (NYSE:IBM) said it
expects a good quarter in PCs, and that the sub $1,000 PC will
get more shoppers into the store. Last week, IBM introduced its
first consumer Aptiva PC priced under $1,000.
"I think the fourth quarter will be good," said James
Firestone, general manager of IBM's consumer division. "There
is a new price point of sub $1,000 and that will get a lot of
people into the stores. I'm looking forward to a good holiday
season."
Copyright 1997, Reuters News Service |
