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Pastimes : The Naked Truth - Big Kahuna a Myth -- Ignore unavailable to you. Want to Upgrade?

To: yard_man who wrote (9640)	10/28/1998 2:38:00 PM
From: MythMan	Respond to of 86076

this must explain why pos2 is down.... >>Wednesday October 28, 2:17 pm Eastern Time PC industry mulls future as report forecasts downturn By Eric Auchard NEW YORK, Oct 28 (Reuters) - The personal computer industry faces tough times ahead as revenue growth is expected to peak in 1999, then sharply decline in 2000, ending 17 years of industry growth, a top technology research firm has argued in a report issued to industry executives earlier this month. The report by Cambridge, Mass.-based Forrester Research Inc., which was described in a news release issued Wednesday, has been circulating within industry circles this month. Among the report's most dramatic findings are that PC revenues should surge in 1999 amid a wave of U.S. corporate buying to replace aging equipment unable to handle the year 2000 date change and thus avert computer failures. But beginning in 2000, PC revenues will drop dramatically,the survey of large U.S. corporate buyers found. Revenues will then remain stagnant through 2002 as PC makers slash prices to stimulate demand and corporate buyers embrace cheaper Internet appliances,the report stated. The report, entitled ''PC Industry Roller Coaster,'' was culled from a survey of corporate PC buyers at 50 U.S. ''Fortune 1000'' companies and officials at roughly 20 top PC manufacturers and key technology suppliers. ''Over the last decade, corporate demand has fueled the PC industry's growth,'' said Carl Howe, author of the report. ''But the year 2000 crisis will upset that demand, and PC makers will get stuck with excess inventory when that demand dries up,'' he said. The research, which was distributed to Wall Street brokers early in October -- ahead of the corporate earnings season -- has contibuted to a wide-ranging debate among analysts, PC vendors, and key customers and investors about the future of an industry reared largely on gee-whiz technology optimism. Faced with possible slowing growth, the PC industry has entered awkward and unfamiliar territory as it mulls possible winners and losers in the face of Year 2000 problems, Euro conversion and economic turmoil in emerging markets. In the report, Forrester said that it expects U.S. PC industry revenues to peak at $55 billion in 1999 as companies buy more PCs than usual to replace their older hardware that is unable to handle the Year 2000 changeover. But this demand will stall in late 1999, causing corporate PC purchases to decline for the first time in 10 years. A downturn, combined with lagging international sales, will force PC makers to cut prices and look to the consumer market for additional sales, according to the Forrester scenario. The combination of fewer shipments and declining prices will pin U.S. PC industry revenues at $47 billion in 2000. By contrast, Forrester predicts that the PC industry will generate revenues of about $53.5 billion in 1998. After 2000, the PC industry will be reshaped by a new set of market forces. Faced with falling corporate sales, PC makers will fight for share in the sub-$1,000 PC market by cutting prices even further. Two-thirds of companies will focus their new software application development on PCs with Internet browsers and on a new generation of Internet-connected appliances, the report argued. Such appliances are expected to sell at far lower costs than current PCs. ''The PC industry will never regain the $8 billion in corporate sales it loses in 2000,'' Howe argued. ''By the time companies complete their year 2000 remediation, a new class of simpler and cheaper Internet appliances will keep the PC market from ever regaining its 1990s glory.'' Forrester predicts PC industry revenues of $47.9 million in 2001 and $47.1 million in 2002, Howe said. The report runs counter to analyses from other top tech research firms that have forecasted a more or less linear growth in demand. Such studies focus on factory shipments, not end sales, and thus do not measure revenues directly. <<