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To: jbn3 who wrote (47307)	6/12/1998 8:56:00 AM
From: John Hauser	Read Replies (1) \| Respond to of 176387

Another naive question.....from your naive poster.... Could someone possibly explain the dynamics of the inverse reaction of the market to the surging value of the U.S. dollar. Just something for my own edification. Thanks, JH

To: jbn3 who wrote (47307)	6/12/1998 9:03:00 AM
From: Gabriel008	Read Replies (1) \| Respond to of 176387

Research article on channel inventories PC Inventories Rise But It's Only A Small Amount The latest data from the StoreBoard market tracking service shows that overall PC inventory levels for nearly all vendors has risen. This increase in inventory is significant because it has recently cast a huge shadow over the profitability of all PC vendors. Here at ZD Market Intelligence, we use a standard inventory measure, which we calculate by dividing the month's sales by the reported inventory level. As you can see, overall inventories are down from their peak, but they are still a bit high. To add to this, May's initial reports show that PC sales through the channel were again weak. To add insult to injury, the specter of June's product refresh in the consumer channel could cause any number of problems in terms of costs for old inventory, so you can bet we'll watch May's numbers closely. Among the leading vendors, the news is not too positive. Compaq saw a slight rise in inventories and now has the highest level in all channels. This is surely not good news given the problems Compaq has had managing inventory. IBM's inventory also crept up. After some real problems in Q4, the company got inventory down, but it has been going back up for the last few months. Apple is also creeping. This has to be watched, especially as they have reduced their number of sales outlets. On the plus side, HP and Packard Bell have kept channel inventory low. PB's inventory is down sequentially, which is actually quite a feat given that their sales have been weak. HP has, once again, shown their strong management. Well, the inventory situation should get very interesting next month when we look at the May data. There is so much product and pricing action going on now, high inventories in May/June will spell bad profits for Q2.