Economic jitters hit PC vendors
Vendors are warning of a spending slump this year amid growing fears of an economic meltdown.
Vendors are warning of a spending slump this year amid growing fears of an economic meltdown.
Disappointing PC sales have hit the Wintel duopoly, with Microsoft and Intel both reporting modest gains for their latest financial quarters and remaining cautious about future earnings.
Microsoft reported turnover of $6.6bn for its second quarter ended 31 December, an eight per cent increase over the $6.1bn reported for the same quarter in 1999.
John Connors, chief financial officer at the software giant, said: "We will remain guarded about the near-term economic outlook and its effect on PC demand and technology spending."
Intel was also conservative. It reported fourth-quarter turnover of $8.7bn, up six per cent on the same period in 1999, but said that fourth-quarter profit was down seven per cent sequentially. The company predicted that turnover will be down by about 15 per cent in the next quarter.
Its main rival, AMD, reported sales of $1.2bn and profit of $178m for the quarter ended 31 December.
Apple also saw turnover dip, with the company reporting its first quarterly loss since chief executive Steve Jobs rejoined in 1997. It reported a net loss of $195m for its first fiscal quarter ended 30 December. "We took our medicine in the last quarter and brought our channel inventories back down to about five and a half weeks," said Jobs.
By contrast, Sun Microsystems and IBM announced much more positive results. Sun saw turnover of $5bn for the quarter ended 31 December, up 44 per cent compared with the same period the year before. Profit for the second quarter was $552m, up 56 per cent compared with profit of $354m in the same period in 1999.
Scott McNealy, chairman and chief executive at Sun, said: "Even with the market dynamics the way they are, the company still managed to gain more market share in this quarter than in previous quarters."
IBM's fourth-quarter turnover in 2000 totalled $25.6bn, a six per cent increase compared with the same period in 1999. The figures were buoyed by strong performances in its mainframe and services businesses, the company said.
First published in Computer Reseller News