IT bellwethers warn of 'softening' market

Dell and Ingram Micro issue downbeat statements on health of IT industry

Dell and Ingram Micro sent shockwaves through the channel today by issuing warnings on the declining health of the IT market.

As the global banking crisis knocked billions off stock exchanges around the world, PC giant Dell said it had seen a “further softening” in global end user demand for IT products in its current quarter.

Meanwhile, Ingram - the world’s largest IT distributor - posted a gloomy revised financial outlook for its third quarter ending 27 September. Both firms are seen as bellwethers for the hardware channel.

Gregory Spierkel, chief executive of Ingram Micro, said: “In Europe, we are not seeing the typical September bounce-back from the summer holidays. North America seemed to be relatively stable in the summer months, but we're experiencing broad-based softness in September.

“We are exiting low-return businesses and categories, particularly in our largest operations, which dampens results during this challenging economic period but will create a more profitable operation in the future."

In a statement, Dell said: “Dell expects to incur costs as it realigns its business to improve competitiveness, reduce headcount and invest in infrastructure and acquisitions, but is committed to working aggressively on cost initiatives that will benefit its P&L over time with improved growth, profitability and cash flow.”
Dell is due to report third quarter fiscal year 2009 results on 20 November.