US IT industry's pulse quickens

MUMBAI: Signs of growth in the US computer hardware industry have begun to surface. Industry observers say that the signs are modest and sporadic, but successive positive indications are accumulating.

Even though consumer spending is subdued, consumer spending on PCs and electronics has been better. What is awaited now is an indication of growth in corporate spending that alone can lead a full recovery in the hardware sector. Several US companies like Apple Computer, IBM, HP and Dell could gain.

Even though the GDP grew 3.1 per cent in the second quarter of 2003, the sixth consecutive quarter of positive growth, certain amount of caution hangs over IT spending by the corporate clients, possibly a backlash from the excesses committed during the dot-com boom of late 1990s. Also there has been no compelling technological advances to warrant a rush. Nevertheless, indications of IT hardware spending growth are beginning to accumulate.

According to the commerce department reports, spending on IT equipment had the highest growth in the June 2003 quarter —7.6 per cent--since 2000. U.S. PC unit shipments (including low-end servers) were up 11 per cent in the June, 2003 quarter. This is the first time growth has returned to double digits in three years, according to industry sources.

Intel Corp. recently raised its September quarter revenue forecast, surprising many. The company is known to be conservative in its estimates. The positive revision flows from unexpectedly strong demand across all geographic regions in Intel’s core business--microprocessors, chipsets, and motherboards. This could be an early indication of better times for the Indian software industry, as higher corporate spending is likely to bring in more business in the solutions and net related business.

Source: IRIS