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Technology Stocks : Dell Technologies Inc. -- Ignore unavailable to you. Want to Upgrade?

To: J. P. who wrote (34056)	3/12/1998 11:35:00 AM
From: Mohan Marette	Read Replies (2) \| Respond to of 176387

PC demand,is it falling off??? Don't think so says CI. Check this out guys,note the the highlighted stuff. -------------------------------------------------------------------- Courtsey: Computer Intelligence/ZDnet-for Private Use Only. March 12, 1998 Is PC Demand Falling Off? Why Not Ask the Customers? We Did! Now that Compaq has joined Intel in announcing that revenues will fall short of expectations this quarter, there's some hue and cry that demand is falling off. While most market research firms and nearly all Wall Street analysts take their cue from the vendor's themselves, here at Insider we believe that the more appropriate way to gauge demand is to get information form those who create demand - the end users! So while some so-called "market analysts" are forecasting lower numbers and mumbling about a decline in growth because Intel and Compaq told them so, I'm not buying that bull. [Mohan-'I love this guy' and I am not buying it either.<<GGG>>>] Demand for PCs in U.S. business is still strong, and end-users are still planning to buy in very reasonable numbers. I've maintained ever since Intel's initial announcement that some spotty inventory problems (Compaq's the biggest problem here) and some bad elasticity assumptions are hurting some specific vendors. Recent reporting by a major reseller magazine detailed Compaq inventory at more than 200,000 units, and Dell has publicly maintained what I've known all along - demand is still strong. To highlight what real customers are saying, InfoBeads is introducing a new index for PCs. This index measures planned purchase activity among customers. Each month CI interviews more than 8000 end-user sites concerning their planned purchases of PC products for the next 12 months. This information is compiled, and the actual number of planned purchases is then compared to a base month. In this case, April 1997. The results are separated for Desktop and Notebook PCs. If we look at the Planned Purchase Index for Desktop PCs, there's one thing that really jumps up, and that's the simple fact that from April of last year until the present, there's really not much deviation from a strong overall planned purchasing level. If there was a huge dip in Q3 or Q4, one could reasonably argue that demand would be suffering in Q1 of this year. However the dip in November and December is not large enough to foreshadow any real decline. In addition, this is a measure of purchase intentions over a 12 month period, so we'd need to see more than a minor decline for a couple of month's plans to make me believe that we're going to find far lower purchasing activity. In addition, let's not forget the strength of the U.S. economy. On the notebook front it is possible to make a case that there could be some small hiccup in demand, but again, looking at the strength of the market in January and February, coupled with strength in Q2 and Q3 of last year, I personally find it hard to believe that we could pin an entire market slowdown on weaker notebook sales. Especially given that the index only dropped below 1.0 for two months. Further, none of the announcements has identified notebooks as a weak area for vendors. Also, the low-end "retail" notebook is selling like gangbusters! It's also worth noting that the index covers all sizes of companies, and notebook purchases at many smaller firms are done on an ad-hoc (i.e. a senior executive deciding that they want one) basis. Also, whereas April was a moderate month for desktop planned purchases, hence a lower index point, April was very strong for notebooks, which has generated a higher index point. Stay tuned to InfoBead Insider. We'll have the corporate PC purchase index (tracks actual purchases) and the retail sales index for February in this space quite soon.