IDC to lower 2000 US PC sales forecast

By : |November 30, 2000 0

Peter Henderson

SAN FRANCISCO: Computer research company International Data Corp. (IDC) is
preparing to cut its widely watched forecasts for personal computer sales this
year because of the slow start to holiday buying season, company analysts said
on Thursday.

IDC’s revised forecasts, to be issued Monday, will reflect the sudden and
unexpected slump in US household consumer purchases taking hold in the fourth
quarter, analysts said.



"The previous US forecast for all PCs is in the mid to high teens for
the year. This will be substantially below that. There’s an issue as to whether
it’ll even be double-digit," Roger Kay, an IDC analyst, told Reuters.

"Retail’s been pushing back for a month now. Inventory’s been building
up. I think you’re gonna see some pretty serious price wars," he said.

Announcements by computer makers Gateway Inc. and Hewlett-Packard Co. in the
last two days have intensified fears that computer sales are heading into a
broader slump.

Loren Loverde, director of IDC’s worldwide PC tracker program, laid the blame
on consumers who, he said, have no incentive to upgrade existing computers.

"We had expected a fourth-quarter uptick, but the softness in that
segment of the market based on some vendor results right now is a little bit

Stephen Baker, an analyst at PC Data Inc., which focuses on consumer sales,
said retail spending on personal computers might not grow at all in 2000.

"It is probably going to be about flat with last year with PC retail
sales. I think everybody had been looking at the 15 per cent (growth)
range," he told Reuters.

Industry analysts had been looking for a particularly strong fourth quarter
this year, because of a relatively weak result in 1999, when rebates from
Internet providers had drawn sales earlier in the year.

"This is a big surprise," said Baker. "People thought given
what we had seen last year, this year there would be some real opportunities for
Christmas," he said.

The silver lining is that the consumer electronics industry as a whole is
still doing relatively well because of strong sales of digital cameras, CD-ROM
drives and other computer accessories.

One indication of that trend: October retail sales for the industry as a
whole were up 12.2 per cent compared with a year earlier to around $3 billion.
But excluding desktop PCs, sales grew a faster 16.3 per cent to $2.35 billion,
he said.

"I don’t think that this is a PC products industry issue. It is a PC
issue. People are still spending money," Baker said.

(C) Reuters Limited 2000.

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